Correlation Between Merida Industry and Makalot Industrial
Can any of the company-specific risk be diversified away by investing in both Merida Industry and Makalot Industrial 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 Merida Industry and Makalot Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merida Industry Co and Makalot Industrial Co, you can compare the effects of market volatilities on Merida Industry and Makalot Industrial 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 Merida Industry with a short position of Makalot Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merida Industry and Makalot Industrial.
Diversification Opportunities for Merida Industry and Makalot Industrial
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Merida and Makalot is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Merida Industry Co and Makalot Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makalot Industrial and Merida Industry 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 Merida Industry Co are associated (or correlated) with Makalot Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makalot Industrial has no effect on the direction of Merida Industry i.e., Merida Industry and Makalot Industrial go up and down completely randomly.
Pair Corralation between Merida Industry and Makalot Industrial
Assuming the 90 days trading horizon Merida Industry Co is expected to under-perform the Makalot Industrial. In addition to that, Merida Industry is 1.16 times more volatile than Makalot Industrial Co. It trades about -0.01 of its total potential returns per unit of risk. Makalot Industrial Co is currently generating about -0.01 per unit of volatility. If you would invest 34,900 in Makalot Industrial Co on September 2, 2024 and sell it today you would lose (2,850) from holding Makalot Industrial Co or give up 8.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merida Industry Co vs. Makalot Industrial Co
Performance |
| Timeline |
| Merida Industry |
| Makalot Industrial |
Merida Industry and Makalot Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merida Industry and Makalot Industrial
The main advantage of trading using opposite Merida Industry and Makalot Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merida Industry position performs unexpectedly, Makalot Industrial 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 Makalot Industrial will offset losses from the drop in Makalot Industrial's long position.| Merida Industry vs. Giant Manufacturing Co | Merida Industry vs. Cheng Shin Rubber | Merida Industry vs. Feng Tay Enterprises | Merida Industry vs. President Chain Store |
| Makalot Industrial vs. Chaintech Technology Corp | Makalot Industrial vs. Avision | Makalot Industrial vs. Clevo Co | Makalot Industrial vs. Elitegroup Computer Systems |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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