Correlation Between Aurelius Technologies and Magni Tech
Can any of the company-specific risk be diversified away by investing in both Aurelius Technologies 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 Aurelius Technologies and Magni Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelius Technologies Bhd and Magni Tech Industries, you can compare the effects of market volatilities on Aurelius Technologies 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 Aurelius Technologies with a short position of Magni Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelius Technologies and Magni Tech.
Diversification Opportunities for Aurelius Technologies and Magni Tech
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aurelius and Magni is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Aurelius Technologies Bhd 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 Aurelius Technologies 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 Aurelius Technologies Bhd 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 Aurelius Technologies i.e., Aurelius Technologies and Magni Tech go up and down completely randomly.
Pair Corralation between Aurelius Technologies and Magni Tech
Assuming the 90 days trading horizon Aurelius Technologies Bhd is expected to under-perform the Magni Tech. In addition to that, Aurelius Technologies is 1.35 times more volatile than Magni Tech Industries. It trades about -0.3 of its total potential returns per unit of risk. Magni Tech Industries is currently generating about -0.18 per unit of volatility. If you would invest 252.00 in Magni Tech Industries on November 4, 2024 and sell it today you would lose (11.00) from holding Magni Tech Industries or give up 4.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurelius Technologies Bhd vs. Magni Tech Industries
Performance |
| Timeline |
| Aurelius Technologies Bhd |
| Magni Tech Industries |
Aurelius Technologies and Magni Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelius Technologies and Magni Tech
The main advantage of trading using opposite Aurelius Technologies and Magni Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelius Technologies 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.| Aurelius Technologies vs. ViTrox Bhd | Aurelius Technologies vs. MI Technovation Bhd | Aurelius Technologies vs. Globetronics Tech Bhd | Aurelius Technologies vs. AirAsia X 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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