Correlation Between MI Technovation and Meridian Bhd
Can any of the company-specific risk be diversified away by investing in both MI Technovation and Meridian 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 MI Technovation and Meridian Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MI Technovation Bhd and Meridian Bhd, you can compare the effects of market volatilities on MI Technovation and Meridian 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 MI Technovation with a short position of Meridian Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of MI Technovation and Meridian Bhd.
Diversification Opportunities for MI Technovation and Meridian Bhd
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between 5286 and Meridian is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding MI Technovation Bhd and Meridian Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Bhd and MI Technovation 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 MI Technovation Bhd are associated (or correlated) with Meridian Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Bhd has no effect on the direction of MI Technovation i.e., MI Technovation and Meridian Bhd go up and down completely randomly.
Pair Corralation between MI Technovation and Meridian Bhd
Assuming the 90 days trading horizon MI Technovation is expected to generate 4.81 times less return on investment than Meridian Bhd. But when comparing it to its historical volatility, MI Technovation Bhd is 5.46 times less risky than Meridian Bhd. It trades about 0.09 of its potential returns per unit of risk. Meridian Bhd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Meridian Bhd on September 4, 2024 and sell it today you would earn a total of 0.50 from holding Meridian Bhd or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MI Technovation Bhd vs. Meridian Bhd
Performance |
| Timeline |
| MI Technovation Bhd |
| Meridian Bhd |
MI Technovation and Meridian Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MI Technovation and Meridian Bhd
The main advantage of trading using opposite MI Technovation and Meridian Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MI Technovation position performs unexpectedly, Meridian 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 Meridian Bhd will offset losses from the drop in Meridian Bhd's long position.| MI Technovation vs. ViTrox Bhd | MI Technovation vs. Minetech Resources Bhd | MI Technovation vs. Swift Haulage Bhd | MI Technovation vs. Insas Bhd |
| Meridian Bhd vs. Ho Hup Construction | Meridian Bhd vs. Radiant Globaltech Bhd | Meridian Bhd vs. SFP Tech Holdings | Meridian Bhd vs. MI Technovation 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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