Correlation Between EA Technique and Magni Tech
Can any of the company-specific risk be diversified away by investing in both EA Technique 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 EA Technique and Magni Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EA Technique M and Magni Tech Industries, you can compare the effects of market volatilities on EA Technique 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 EA Technique with a short position of Magni Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Technique and Magni Tech.
Diversification Opportunities for EA Technique and Magni Tech
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between 5259 and Magni is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding EA Technique M 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 EA Technique 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 EA Technique M 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 EA Technique i.e., EA Technique and Magni Tech go up and down completely randomly.
Pair Corralation between EA Technique and Magni Tech
Assuming the 90 days trading horizon EA Technique M is expected to generate 3.94 times more return on investment than Magni Tech. However, EA Technique is 3.94 times more volatile than Magni Tech Industries. It trades about 0.04 of its potential returns per unit of risk. Magni Tech Industries is currently generating about 0.06 per unit of risk. If you would invest 25.00 in EA Technique M on November 4, 2024 and sell it today you would earn a total of 6.00 from holding EA Technique M or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Technique M vs. Magni Tech Industries
Performance |
| Timeline |
| EA Technique M |
| Magni Tech Industries |
EA Technique and Magni Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Technique and Magni Tech
The main advantage of trading using opposite EA Technique and Magni Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Technique 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.| EA Technique vs. CB Industrial Product | EA Technique vs. Choo Bee Metal | EA Technique vs. Kawan Food Bhd | EA Technique vs. Sapura Industrial Bhd |
| Magni Tech vs. CPE Technology Berhad | Magni Tech vs. Ho Hup Construction | Magni Tech vs. Sports Toto Berhad | Magni Tech vs. Homeritz 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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