Correlation Between Press Metal and Magni Tech
Can any of the company-specific risk be diversified away by investing in both Press Metal 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 Press Metal and Magni Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Press Metal Bhd and Magni Tech Industries, you can compare the effects of market volatilities on Press Metal 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 Press Metal with a short position of Magni Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Press Metal and Magni Tech.
Diversification Opportunities for Press Metal and Magni Tech
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Press and Magni is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Press Metal 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 Press Metal 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 Press Metal 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 Press Metal i.e., Press Metal and Magni Tech go up and down completely randomly.
Pair Corralation between Press Metal and Magni Tech
Assuming the 90 days trading horizon Press Metal Bhd is expected to generate 0.85 times more return on investment than Magni Tech. However, Press Metal Bhd is 1.18 times less risky than Magni Tech. It trades about 0.13 of its potential returns per unit of risk. Magni Tech Industries is currently generating about -0.03 per unit of risk. If you would invest 488.00 in Press Metal Bhd on November 29, 2024 and sell it today you would earn a total of 12.00 from holding Press Metal Bhd or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Press Metal Bhd vs. Magni Tech Industries
Performance |
| Timeline |
| Press Metal Bhd |
| Magni Tech Industries |
Press Metal and Magni Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Press Metal and Magni Tech
The main advantage of trading using opposite Press Metal and Magni Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Press Metal 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.| Press Metal vs. Tex Cycle Technology | Press Metal vs. Shangri La Hotels | Press Metal vs. Coraza Integrated Technology | Press Metal vs. Greatech Technology Bhd |
| Magni Tech vs. Cengild Medical Berhad | Magni Tech vs. YX Precious Metals | Magni Tech vs. Silver Ridge Holdings | Magni Tech vs. EA Technique M |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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