Correlation Between Magni Tech and Minetech Resources
Can any of the company-specific risk be diversified away by investing in both Magni Tech and Minetech Resources 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 Minetech Resources 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 Minetech Resources Bhd, you can compare the effects of market volatilities on Magni Tech and Minetech Resources 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 Minetech Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magni Tech and Minetech Resources.
Diversification Opportunities for Magni Tech and Minetech Resources
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Magni and Minetech is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Magni Tech Industries and Minetech Resources Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minetech Resources 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 Minetech Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minetech Resources Bhd has no effect on the direction of Magni Tech i.e., Magni Tech and Minetech Resources go up and down completely randomly.
Pair Corralation between Magni Tech and Minetech Resources
Assuming the 90 days trading horizon Magni Tech Industries is expected to generate 0.42 times more return on investment than Minetech Resources. However, Magni Tech Industries is 2.36 times less risky than Minetech Resources. It trades about 0.1 of its potential returns per unit of risk. Minetech Resources Bhd is currently generating about 0.0 per unit of risk. If you would invest 191.00 in Magni Tech Industries on August 27, 2024 and sell it today you would earn a total of 66.00 from holding Magni Tech Industries or generate 34.55% 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. Minetech Resources Bhd
Performance |
| Timeline |
| Magni Tech Industries |
| Minetech Resources Bhd |
Magni Tech and Minetech Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magni Tech and Minetech Resources
The main advantage of trading using opposite Magni Tech and Minetech Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magni Tech position performs unexpectedly, Minetech Resources 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 Minetech Resources will offset losses from the drop in Minetech Resources' long position.| Magni Tech vs. Digistar Bhd | Magni Tech vs. Minetech Resources Bhd | Magni Tech vs. OpenSys M 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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