Correlation Between Cyber Media and MIC Electronics
Can any of the company-specific risk be diversified away by investing in both Cyber Media and MIC Electronics 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 Cyber Media and MIC Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cyber Media Research and MIC Electronics Limited, you can compare the effects of market volatilities on Cyber Media and MIC Electronics 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 Cyber Media with a short position of MIC Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cyber Media and MIC Electronics.
Diversification Opportunities for Cyber Media and MIC Electronics
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cyber and MIC is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cyber Media Research and MIC Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIC Electronics and Cyber Media 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 Cyber Media Research are associated (or correlated) with MIC Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIC Electronics has no effect on the direction of Cyber Media i.e., Cyber Media and MIC Electronics go up and down completely randomly.
Pair Corralation between Cyber Media and MIC Electronics
Assuming the 90 days trading horizon Cyber Media Research is expected to generate 0.98 times more return on investment than MIC Electronics. However, Cyber Media Research is 1.02 times less risky than MIC Electronics. It trades about -0.02 of its potential returns per unit of risk. MIC Electronics Limited is currently generating about -0.2 per unit of risk. If you would invest 9,100 in Cyber Media Research on November 28, 2024 and sell it today you would lose (320.00) from holding Cyber Media Research or give up 3.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cyber Media Research vs. MIC Electronics Limited
Performance |
| Timeline |
| Cyber Media Research |
| MIC Electronics |
Cyber Media and MIC Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cyber Media and MIC Electronics
The main advantage of trading using opposite Cyber Media and MIC Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cyber Media position performs unexpectedly, MIC Electronics 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 MIC Electronics will offset losses from the drop in MIC Electronics' long position.| Cyber Media vs. Sapphire Foods India | Cyber Media vs. Le Travenues Technology | Cyber Media vs. Foods Inns Limited | Cyber Media vs. WESTLIFE FOODWORLD LIMITED |
| MIC Electronics vs. Speciality Restaurants Limited | MIC Electronics vs. Apex Frozen Foods | MIC Electronics vs. Kohinoor Foods Limited | MIC Electronics vs. Valiant Organics Limited |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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