Correlation Between Magni Tech and Insas Bhd
Can any of the company-specific risk be diversified away by investing in both Magni Tech and Insas 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 Magni Tech and Insas Bhd 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 Insas Bhd, you can compare the effects of market volatilities on Magni Tech and Insas 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 Magni Tech with a short position of Insas Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magni Tech and Insas Bhd.
Diversification Opportunities for Magni Tech and Insas Bhd
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magni and Insas is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Magni Tech Industries and Insas Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insas Bhd 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 Insas Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insas Bhd has no effect on the direction of Magni Tech i.e., Magni Tech and Insas Bhd go up and down completely randomly.
Pair Corralation between Magni Tech and Insas Bhd
Assuming the 90 days trading horizon Magni Tech Industries is expected to generate 0.67 times more return on investment than Insas Bhd. However, Magni Tech Industries is 1.49 times less risky than Insas Bhd. It trades about 0.49 of its potential returns per unit of risk. Insas Bhd is currently generating about -0.09 per unit of risk. If you would invest 244.00 in Magni Tech Industries on September 4, 2024 and sell it today you would earn a total of 26.00 from holding Magni Tech Industries or generate 10.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Magni Tech Industries vs. Insas Bhd
Performance |
| Timeline |
| Magni Tech Industries |
| Insas Bhd |
Magni Tech and Insas Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magni Tech and Insas Bhd
The main advantage of trading using opposite Magni Tech and Insas Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magni Tech position performs unexpectedly, Insas 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 Insas Bhd will offset losses from the drop in Insas Bhd's long position.| Magni Tech vs. ES Ceramics Technology | Magni Tech vs. Minetech Resources Bhd | Magni Tech vs. Swift Haulage Bhd | Magni Tech vs. Insas Bhd |
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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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