Correlation Between Malaysia Steel and Magni Tech
Can any of the company-specific risk be diversified away by investing in both Malaysia Steel and Magni Tech 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 Malaysia Steel and Magni Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malaysia Steel Works and Magni Tech Industries, you can compare the effects of market volatilities on Malaysia Steel and Magni Tech 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 Malaysia Steel with a short position of Magni Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malaysia Steel and Magni Tech.
Diversification Opportunities for Malaysia Steel and Magni Tech
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Malaysia and Magni is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Malaysia Steel Works and Magni Tech Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magni Tech Industries and Malaysia 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 Malaysia Steel Works are associated (or correlated) with Magni Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magni Tech Industries has no effect on the direction of Malaysia Steel i.e., Malaysia Steel and Magni Tech go up and down completely randomly.
Pair Corralation between Malaysia Steel and Magni Tech
Assuming the 90 days trading horizon Malaysia Steel is expected to generate 1.6 times less return on investment than Magni Tech. In addition to that, Malaysia Steel is 2.04 times more volatile than Magni Tech Industries. It trades about 0.16 of its total potential returns per unit of risk. Magni Tech Industries is currently generating about 0.51 per unit of volatility. If you would invest 243.00 in Magni Tech Industries on September 1, 2024 and sell it today you would earn a total of 27.00 from holding Magni Tech Industries or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malaysia Steel Works vs. Magni Tech Industries
Performance |
| Timeline |
| Malaysia Steel Works |
| Magni Tech Industries |
Malaysia Steel and Magni Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malaysia Steel and Magni Tech
The main advantage of trading using opposite Malaysia Steel and Magni Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malaysia Steel position performs unexpectedly, Magni Tech 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 Magni Tech will offset losses from the drop in Magni Tech's long position.| Malaysia Steel vs. Pantech Group Holdings | Malaysia Steel vs. Coraza Integrated Technology | Malaysia Steel vs. Choo Bee Metal | Malaysia Steel vs. Eonmetall Group Bhd |
| Magni Tech vs. YX Precious Metals | Magni Tech vs. SSF Home Group | Magni Tech vs. Mycron Steel Bhd | Magni Tech vs. Malaysia Steel Works |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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