Correlation Between Motech Industries and ANJI Technology
Can any of the company-specific risk be diversified away by investing in both Motech Industries and ANJI Technology 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 Motech Industries and ANJI Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Motech Industries Co and ANJI Technology Co, you can compare the effects of market volatilities on Motech Industries and ANJI Technology 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 Motech Industries with a short position of ANJI Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motech Industries and ANJI Technology.
Diversification Opportunities for Motech Industries and ANJI Technology
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Motech and ANJI is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Motech Industries Co and ANJI Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANJI Technology and Motech Industries 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 Motech Industries Co are associated (or correlated) with ANJI Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANJI Technology has no effect on the direction of Motech Industries i.e., Motech Industries and ANJI Technology go up and down completely randomly.
Pair Corralation between Motech Industries and ANJI Technology
Assuming the 90 days trading horizon Motech Industries Co is expected to generate 0.68 times more return on investment than ANJI Technology. However, Motech Industries Co is 1.48 times less risky than ANJI Technology. It trades about 0.03 of its potential returns per unit of risk. ANJI Technology Co is currently generating about -0.13 per unit of risk. If you would invest 2,430 in Motech Industries Co on August 30, 2024 and sell it today you would earn a total of 20.00 from holding Motech Industries Co or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Motech Industries Co vs. ANJI Technology Co
Performance |
| Timeline |
| Motech Industries |
| ANJI Technology |
Motech Industries and ANJI Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Motech Industries and ANJI Technology
The main advantage of trading using opposite Motech Industries and ANJI Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Motech Industries position performs unexpectedly, ANJI Technology 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 ANJI Technology will offset losses from the drop in ANJI Technology's long position.| Motech Industries vs. United Renewable Energy | Motech Industries vs. Sino American Silicon Products | Motech Industries vs. Wafer Works | Motech Industries vs. Gigasolar Materials |
| ANJI Technology vs. TSEC Corp | ANJI Technology vs. United Renewable Energy | ANJI Technology vs. Tainergy Tech Co | ANJI Technology vs. Motech Industries Co |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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