Correlation Between Magni Tech and ES Ceramics
Can any of the company-specific risk be diversified away by investing in both Magni Tech and ES Ceramics 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 Magni Tech and ES Ceramics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magni Tech Industries and ES Ceramics Technology, you can compare the effects of market volatilities on Magni Tech and ES Ceramics 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 Magni Tech with a short position of ES Ceramics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magni Tech and ES Ceramics.
Diversification Opportunities for Magni Tech and ES Ceramics
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magni and 0100 is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Magni Tech Industries and ES Ceramics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES Ceramics Technology and Magni Tech 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 Magni Tech Industries are associated (or correlated) with ES Ceramics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES Ceramics Technology has no effect on the direction of Magni Tech i.e., Magni Tech and ES Ceramics go up and down completely randomly.
Pair Corralation between Magni Tech and ES Ceramics
Assuming the 90 days trading horizon Magni Tech Industries is expected to generate 0.39 times more return on investment than ES Ceramics. However, Magni Tech Industries is 2.53 times less risky than ES Ceramics. It trades about 0.41 of its potential returns per unit of risk. ES Ceramics Technology is currently generating about -0.12 per unit of risk. If you would invest 245.00 in Magni Tech Industries on August 28, 2024 and sell it today you would earn a total of 21.00 from holding Magni Tech Industries or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magni Tech Industries vs. ES Ceramics Technology
Performance |
| Timeline |
| Magni Tech Industries |
| ES Ceramics Technology |
Magni Tech and ES Ceramics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magni Tech and ES Ceramics
The main advantage of trading using opposite Magni Tech and ES Ceramics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magni Tech position performs unexpectedly, ES Ceramics 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 ES Ceramics will offset losses from the drop in ES Ceramics' long position.| Magni Tech vs. Coraza Integrated Technology | Magni Tech vs. Greatech Technology Bhd | Magni Tech vs. Cosmos Technology International | Magni Tech vs. British American Tobacco |
| ES Ceramics vs. Digistar Bhd | ES Ceramics vs. Minetech Resources Bhd | ES Ceramics vs. OpenSys M Bhd | ES Ceramics vs. Insas 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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