Correlation Between MyTech Group and Aurelius Technologies
Can any of the company-specific risk be diversified away by investing in both MyTech Group and Aurelius Technologies 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 MyTech Group and Aurelius Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MyTech Group Bhd and Aurelius Technologies Bhd, you can compare the effects of market volatilities on MyTech Group and Aurelius Technologies 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 MyTech Group with a short position of Aurelius Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of MyTech Group and Aurelius Technologies.
Diversification Opportunities for MyTech Group and Aurelius Technologies
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between MyTech and Aurelius is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding MyTech Group Bhd and Aurelius Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelius Technologies Bhd and MyTech Group 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 MyTech Group Bhd are associated (or correlated) with Aurelius Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelius Technologies Bhd has no effect on the direction of MyTech Group i.e., MyTech Group and Aurelius Technologies go up and down completely randomly.
Pair Corralation between MyTech Group and Aurelius Technologies
Assuming the 90 days trading horizon MyTech Group Bhd is expected to under-perform the Aurelius Technologies. But the stock apears to be less risky and, when comparing its historical volatility, MyTech Group Bhd is 2.0 times less risky than Aurelius Technologies. The stock trades about -0.38 of its potential returns per unit of risk. The Aurelius Technologies Bhd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 296.00 in Aurelius Technologies Bhd on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Aurelius Technologies Bhd or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MyTech Group Bhd vs. Aurelius Technologies Bhd
Performance |
| Timeline |
| MyTech Group Bhd |
| Aurelius Technologies Bhd |
MyTech Group and Aurelius Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MyTech Group and Aurelius Technologies
The main advantage of trading using opposite MyTech Group and Aurelius Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MyTech Group position performs unexpectedly, Aurelius Technologies 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 Aurelius Technologies will offset losses from the drop in Aurelius Technologies' long position.The idea behind MyTech Group Bhd and Aurelius Technologies Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Aurelius Technologies vs. Nova Wellness Group | Aurelius Technologies vs. Radiant Globaltech Bhd | Aurelius Technologies vs. Apex Healthcare Bhd | Aurelius Technologies vs. MI Technovation 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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