Correlation Between Mycron Steel and Genetec Technology
Can any of the company-specific risk be diversified away by investing in both Mycron Steel and Genetec Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mycron Steel and Genetec Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mycron Steel Bhd and Genetec Technology Bhd, you can compare the effects of market volatilities on Mycron Steel and Genetec Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mycron Steel with a short position of Genetec Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mycron Steel and Genetec Technology.
Diversification Opportunities for Mycron Steel and Genetec Technology
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mycron and Genetec is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mycron Steel Bhd and Genetec Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genetec Technology Bhd and Mycron Steel is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mycron Steel Bhd are associated (or correlated) with Genetec Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genetec Technology Bhd has no effect on the direction of Mycron Steel i.e., Mycron Steel and Genetec Technology go up and down completely randomly.
Pair Corralation between Mycron Steel and Genetec Technology
Assuming the 90 days trading horizon Mycron Steel Bhd is expected to generate 0.91 times more return on investment than Genetec Technology. However, Mycron Steel Bhd is 1.1 times less risky than Genetec Technology. It trades about 0.0 of its potential returns per unit of risk. Genetec Technology Bhd is currently generating about -0.03 per unit of risk. If you would invest 41.00 in Mycron Steel Bhd on September 5, 2024 and sell it today you would lose (6.00) from holding Mycron Steel Bhd or give up 14.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mycron Steel Bhd vs. Genetec Technology Bhd
Performance |
| Timeline |
| Mycron Steel Bhd |
| Genetec Technology Bhd |
Mycron Steel and Genetec Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mycron Steel and Genetec Technology
The main advantage of trading using opposite Mycron Steel and Genetec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mycron Steel position performs unexpectedly, Genetec Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Genetec Technology will offset losses from the drop in Genetec Technology's long position.The idea behind Mycron Steel Bhd and Genetec Technology Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Genetec Technology vs. DC HEALTHCARE HOLDINGS | Genetec Technology vs. Press Metal Bhd | Genetec Technology vs. Mycron Steel Bhd | Genetec Technology vs. Southern Steel Bhd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stocks Directory module to find actively traded stocks across global markets.
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