Correlation Between Mycron Steel and TechnoDex Bhd
Can any of the company-specific risk be diversified away by investing in both Mycron Steel and TechnoDex Bhd 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 TechnoDex Bhd 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 TechnoDex Bhd, you can compare the effects of market volatilities on Mycron Steel and TechnoDex Bhd 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 TechnoDex Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mycron Steel and TechnoDex Bhd.
Diversification Opportunities for Mycron Steel and TechnoDex Bhd
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mycron and TechnoDex is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Mycron Steel Bhd and TechnoDex Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnoDex 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 TechnoDex Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TechnoDex Bhd has no effect on the direction of Mycron Steel i.e., Mycron Steel and TechnoDex Bhd go up and down completely randomly.
Pair Corralation between Mycron Steel and TechnoDex Bhd
Assuming the 90 days trading horizon Mycron Steel is expected to generate 8.91 times less return on investment than TechnoDex Bhd. But when comparing it to its historical volatility, Mycron Steel Bhd is 1.69 times less risky than TechnoDex Bhd. It trades about 0.02 of its potential returns per unit of risk. TechnoDex Bhd is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6.00 in TechnoDex Bhd on August 28, 2024 and sell it today you would earn a total of 0.50 from holding TechnoDex Bhd or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mycron Steel Bhd vs. TechnoDex Bhd
Performance |
| Timeline |
| Mycron Steel Bhd |
| TechnoDex Bhd |
Mycron Steel and TechnoDex Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mycron Steel and TechnoDex Bhd
The main advantage of trading using opposite Mycron Steel and TechnoDex Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mycron Steel position performs unexpectedly, TechnoDex Bhd 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 TechnoDex Bhd will offset losses from the drop in TechnoDex Bhd's long position.| Mycron Steel vs. ES Ceramics Technology | Mycron Steel vs. Minetech Resources Bhd | Mycron Steel vs. Dnonce Tech Bhd | Mycron Steel vs. SFP Tech Holdings |
| TechnoDex Bhd vs. ES Ceramics Technology | TechnoDex Bhd vs. Cloudpoint Technology Berhad | TechnoDex Bhd vs. Mycron Steel Bhd | TechnoDex Bhd vs. Cengild Medical Berhad |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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