Correlation Between Minetech Resources and ES Ceramics
Can any of the company-specific risk be diversified away by investing in both Minetech Resources 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 Minetech Resources and ES Ceramics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minetech Resources Bhd and ES Ceramics Technology, you can compare the effects of market volatilities on Minetech Resources 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 Minetech Resources with a short position of ES Ceramics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minetech Resources and ES Ceramics.
Diversification Opportunities for Minetech Resources and ES Ceramics
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Minetech and 0100 is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Minetech Resources Bhd 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 Minetech Resources 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 Minetech Resources Bhd 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 Minetech Resources i.e., Minetech Resources and ES Ceramics go up and down completely randomly.
Pair Corralation between Minetech Resources and ES Ceramics
Assuming the 90 days trading horizon Minetech Resources Bhd is expected to generate 1.11 times more return on investment than ES Ceramics. However, Minetech Resources is 1.11 times more volatile than ES Ceramics Technology. It trades about 0.02 of its potential returns per unit of risk. ES Ceramics Technology is currently generating about -0.08 per unit of risk. If you would invest 14.00 in Minetech Resources Bhd on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Minetech Resources Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Minetech Resources Bhd vs. ES Ceramics Technology
Performance |
| Timeline |
| Minetech Resources Bhd |
| ES Ceramics Technology |
Minetech Resources and ES Ceramics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minetech Resources and ES Ceramics
The main advantage of trading using opposite Minetech Resources and ES Ceramics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minetech Resources 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.| Minetech Resources vs. Supercomnet Technologies Bhd | Minetech Resources vs. Duopharma Biotech Bhd | Minetech Resources vs. ONETECH SOLUTIONS HOLDINGS | Minetech Resources vs. Melewar Industrial Group |
| ES Ceramics vs. Star Media Group | ES Ceramics vs. IHH Healthcare Bhd | ES Ceramics vs. KPJ Healthcare Bhd | ES Ceramics vs. Nova Wellness Group |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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