Correlation Between Tomei Consolidated and Magni Tech
Can any of the company-specific risk be diversified away by investing in both Tomei Consolidated 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 Tomei Consolidated and Magni Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tomei Consolidated Bhd and Magni Tech Industries, you can compare the effects of market volatilities on Tomei Consolidated 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 Tomei Consolidated with a short position of Magni Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tomei Consolidated and Magni Tech.
Diversification Opportunities for Tomei Consolidated and Magni Tech
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tomei and Magni is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Tomei Consolidated 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 Tomei Consolidated 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 Tomei Consolidated 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 Tomei Consolidated i.e., Tomei Consolidated and Magni Tech go up and down completely randomly.
Pair Corralation between Tomei Consolidated and Magni Tech
Assuming the 90 days trading horizon Tomei Consolidated Bhd is expected to under-perform the Magni Tech. In addition to that, Tomei Consolidated is 1.96 times more volatile than Magni Tech Industries. It trades about -0.34 of its total potential returns per unit of risk. Magni Tech Industries is currently generating about 0.5 per unit of volatility. If you would invest 243.00 in Magni Tech Industries on September 2, 2024 and sell it today you would earn a total of 27.00 from holding Magni Tech Industries or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tomei Consolidated Bhd vs. Magni Tech Industries
Performance |
| Timeline |
| Tomei Consolidated Bhd |
| Magni Tech Industries |
Tomei Consolidated and Magni Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tomei Consolidated and Magni Tech
The main advantage of trading using opposite Tomei Consolidated and Magni Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tomei Consolidated 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.| Tomei Consolidated vs. Melewar Industrial Group | Tomei Consolidated vs. Kossan Rubber Industries | Tomei Consolidated vs. Eversafe Rubber Bhd | Tomei Consolidated vs. Diversified Gateway Solutions |
| Magni Tech vs. Southern Steel Bhd | Magni Tech vs. Al Aqar Healthcare | Magni Tech vs. Sports Toto Berhad | Magni Tech vs. KPJ Healthcare 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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