Correlation Between BacTech Environmental and Majic Wheels
Can any of the company-specific risk be diversified away by investing in both BacTech Environmental and Majic Wheels 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 BacTech Environmental and Majic Wheels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BacTech Environmental and Majic Wheels Corp, you can compare the effects of market volatilities on BacTech Environmental and Majic Wheels 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 BacTech Environmental with a short position of Majic Wheels. Check out your portfolio center. Please also check ongoing floating volatility patterns of BacTech Environmental and Majic Wheels.
Diversification Opportunities for BacTech Environmental and Majic Wheels
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between BacTech and Majic is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding BacTech Environmental and Majic Wheels Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Majic Wheels Corp and BacTech Environmental 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 BacTech Environmental are associated (or correlated) with Majic Wheels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Majic Wheels Corp has no effect on the direction of BacTech Environmental i.e., BacTech Environmental and Majic Wheels go up and down completely randomly.
Pair Corralation between BacTech Environmental and Majic Wheels
If you would invest 2.30 in BacTech Environmental on November 27, 2024 and sell it today you would earn a total of 0.69 from holding BacTech Environmental or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BacTech Environmental vs. Majic Wheels Corp
Performance |
| Timeline |
| BacTech Environmental |
| Majic Wheels Corp |
BacTech Environmental and Majic Wheels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BacTech Environmental and Majic Wheels
The main advantage of trading using opposite BacTech Environmental and Majic Wheels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BacTech Environmental position performs unexpectedly, Majic Wheels 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 Majic Wheels will offset losses from the drop in Majic Wheels' long position.| BacTech Environmental vs. Agilyx AS | BacTech Environmental vs. EcoPlus | BacTech Environmental vs. BQE Water | BacTech Environmental vs. LiCycle Holdings Corp |
| Majic Wheels vs. Ecoloclean Industrs | Majic Wheels vs. BQE Water | Majic Wheels vs. Garb Oil Pwr | Majic Wheels vs. Critic Clothing |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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