Correlation Between TMP Steel and MacroWell OMG
Can any of the company-specific risk be diversified away by investing in both TMP Steel and MacroWell OMG 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 TMP Steel and MacroWell OMG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TMP Steel and MacroWell OMG Digital, you can compare the effects of market volatilities on TMP Steel and MacroWell OMG 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 TMP Steel with a short position of MacroWell OMG. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMP Steel and MacroWell OMG.
Diversification Opportunities for TMP Steel and MacroWell OMG
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TMP and MacroWell is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding TMP Steel and MacroWell OMG Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MacroWell OMG Digital and TMP 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 TMP Steel are associated (or correlated) with MacroWell OMG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MacroWell OMG Digital has no effect on the direction of TMP Steel i.e., TMP Steel and MacroWell OMG go up and down completely randomly.
Pair Corralation between TMP Steel and MacroWell OMG
Assuming the 90 days trading horizon TMP Steel is expected to generate 2.62 times less return on investment than MacroWell OMG. But when comparing it to its historical volatility, TMP Steel is 1.73 times less risky than MacroWell OMG. It trades about 0.02 of its potential returns per unit of risk. MacroWell OMG Digital is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8,574 in MacroWell OMG Digital on September 12, 2024 and sell it today you would earn a total of 1,046 from holding MacroWell OMG Digital or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TMP Steel vs. MacroWell OMG Digital
Performance |
| Timeline |
| TMP Steel |
| MacroWell OMG Digital |
TMP Steel and MacroWell OMG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TMP Steel and MacroWell OMG
The main advantage of trading using opposite TMP Steel and MacroWell OMG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMP Steel position performs unexpectedly, MacroWell OMG 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 MacroWell OMG will offset losses from the drop in MacroWell OMG's long position.| TMP Steel vs. Tong Tai Machine Tool | TMP Steel vs. Oriental Union Chemical | TMP Steel vs. Ruentex Development Co | TMP Steel vs. Symtek Automation Asia |
| MacroWell OMG vs. International Games System | MacroWell OMG vs. Gamania Digital Entertainment | MacroWell OMG vs. Softstar Entertainment | MacroWell OMG vs. X Legend Entertainment 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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