Correlation Between Central Industrial and MQ Technology
Can any of the company-specific risk be diversified away by investing in both Central Industrial and MQ Technology 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 Central Industrial and MQ Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Industrial Corp and MQ Technology Bhd, you can compare the effects of market volatilities on Central Industrial and MQ Technology 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 Central Industrial with a short position of MQ Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Industrial and MQ Technology.
Diversification Opportunities for Central Industrial and MQ Technology
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Central and 0070 is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Central Industrial Corp and MQ Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MQ Technology Bhd and Central Industrial 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 Central Industrial Corp are associated (or correlated) with MQ Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MQ Technology Bhd has no effect on the direction of Central Industrial i.e., Central Industrial and MQ Technology go up and down completely randomly.
Pair Corralation between Central Industrial and MQ Technology
Assuming the 90 days trading horizon Central Industrial is expected to generate 10.8 times less return on investment than MQ Technology. But when comparing it to its historical volatility, Central Industrial Corp is 4.79 times less risky than MQ Technology. It trades about 0.05 of its potential returns per unit of risk. MQ Technology Bhd is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9.00 in MQ Technology Bhd on October 23, 2024 and sell it today you would earn a total of 1.00 from holding MQ Technology Bhd or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Industrial Corp vs. MQ Technology Bhd
Performance |
| Timeline |
| Central Industrial Corp |
| MQ Technology Bhd |
Central Industrial and MQ Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Industrial and MQ Technology
The main advantage of trading using opposite Central Industrial and MQ Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Industrial position performs unexpectedly, MQ Technology 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 MQ Technology will offset losses from the drop in MQ Technology's long position.| Central Industrial vs. Awanbiru Technology Bhd | Central Industrial vs. Mercury Industries Bhd | Central Industrial vs. CB Industrial Product | Central Industrial vs. Choo Bee Metal |
| MQ Technology vs. Lotte Chemical Titan | MQ Technology vs. MClean Technologies Bhd | MQ Technology vs. IHH Healthcare Bhd | MQ Technology vs. DC HEALTHCARE HOLDINGS |
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.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges |