Correlation Between Minetech Resources and Magni Tech
Can any of the company-specific risk be diversified away by investing in both Minetech Resources and Magni 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 Minetech Resources and Magni Tech 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 Magni Tech Industries, you can compare the effects of market volatilities on Minetech Resources and Magni 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 Minetech Resources with a short position of Magni Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minetech Resources and Magni Tech.
Diversification Opportunities for Minetech Resources and Magni Tech
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Minetech and Magni is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Minetech Resources Bhd and Magni Tech Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magni Tech Industries 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 Magni Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magni Tech Industries has no effect on the direction of Minetech Resources i.e., Minetech Resources and Magni Tech go up and down completely randomly.
Pair Corralation between Minetech Resources and Magni Tech
Assuming the 90 days trading horizon Minetech Resources Bhd is expected to generate 2.91 times more return on investment than Magni Tech. However, Minetech Resources is 2.91 times more volatile than Magni Tech Industries. It trades about 0.02 of its potential returns per unit of risk. Magni Tech Industries is currently generating about -0.18 per unit of risk. If you would invest 13.00 in Minetech Resources Bhd on November 4, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minetech Resources Bhd vs. Magni Tech Industries
Performance |
| Timeline |
| Minetech Resources Bhd |
| Magni Tech Industries |
Minetech Resources and Magni Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minetech Resources and Magni Tech
The main advantage of trading using opposite Minetech Resources and Magni Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minetech Resources position performs unexpectedly, Magni 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 Magni Tech will offset losses from the drop in Magni Tech's long position.| Minetech Resources vs. Dnonce Tech Bhd | Minetech Resources vs. Kobay Tech Bhd | Minetech Resources vs. Choo Bee Metal | Minetech Resources vs. Sunzen Biotech Bhd |
| Magni Tech vs. CPE Technology Berhad | Magni Tech vs. Ho Hup Construction | Magni Tech vs. Sports Toto Berhad | Magni Tech vs. Homeritz 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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