Correlation Between Magni Tech and Dnonce Tech
Can any of the company-specific risk be diversified away by investing in both Magni Tech and Dnonce Tech 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 Dnonce Tech 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 Dnonce Tech Bhd, you can compare the effects of market volatilities on Magni Tech and Dnonce Tech 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 Dnonce Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magni Tech and Dnonce Tech.
Diversification Opportunities for Magni Tech and Dnonce Tech
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magni and Dnonce is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Magni Tech Industries and Dnonce Tech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dnonce Tech 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 Dnonce Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dnonce Tech Bhd has no effect on the direction of Magni Tech i.e., Magni Tech and Dnonce Tech go up and down completely randomly.
Pair Corralation between Magni Tech and Dnonce Tech
Assuming the 90 days trading horizon Magni Tech Industries is expected to generate 0.3 times more return on investment than Dnonce Tech. However, Magni Tech Industries is 3.36 times less risky than Dnonce Tech. It trades about 0.49 of its potential returns per unit of risk. Dnonce Tech Bhd is currently generating about 0.02 per unit of risk. If you would invest 244.00 in Magni Tech Industries on September 3, 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magni Tech Industries vs. Dnonce Tech Bhd
Performance |
| Timeline |
| Magni Tech Industries |
| Dnonce Tech Bhd |
Magni Tech and Dnonce Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magni Tech and Dnonce Tech
The main advantage of trading using opposite Magni Tech and Dnonce Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magni Tech position performs unexpectedly, Dnonce Tech 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 Dnonce Tech will offset losses from the drop in Dnonce Tech'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 |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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