Correlation Between Magni Tech and MI Technovation
Can any of the company-specific risk be diversified away by investing in both Magni Tech and MI Technovation 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 MI Technovation 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 MI Technovation Bhd, you can compare the effects of market volatilities on Magni Tech and MI Technovation 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 MI Technovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magni Tech and MI Technovation.
Diversification Opportunities for Magni Tech and MI Technovation
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Magni and 5286 is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Magni Tech Industries and MI Technovation Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MI Technovation 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 MI Technovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MI Technovation Bhd has no effect on the direction of Magni Tech i.e., Magni Tech and MI Technovation go up and down completely randomly.
Pair Corralation between Magni Tech and MI Technovation
Assuming the 90 days trading horizon Magni Tech Industries is expected to generate 0.79 times more return on investment than MI Technovation. However, Magni Tech Industries is 1.27 times less risky than MI Technovation. It trades about 0.03 of its potential returns per unit of risk. MI Technovation Bhd is currently generating about 0.01 per unit of risk. If you would invest 221.00 in Magni Tech Industries on November 28, 2024 and sell it today you would earn a total of 9.00 from holding Magni Tech Industries or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magni Tech Industries vs. MI Technovation Bhd
Performance |
| Timeline |
| Magni Tech Industries |
| MI Technovation Bhd |
Magni Tech and MI Technovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magni Tech and MI Technovation
The main advantage of trading using opposite Magni Tech and MI Technovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magni Tech position performs unexpectedly, MI Technovation 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 MI Technovation will offset losses from the drop in MI Technovation's long position.The idea behind Magni Tech Industries and MI Technovation Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MI Technovation vs. Press Metal Bhd | MI Technovation vs. Choo Bee Metal | MI Technovation vs. Datasonic Group Bhd | MI Technovation vs. Leader Steel Holdings |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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