Correlation Between Converge Technology and Mene
Can any of the company-specific risk be diversified away by investing in both Converge Technology and Mene 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 Converge Technology and Mene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Converge Technology Solutions and Mene Inc, you can compare the effects of market volatilities on Converge Technology and Mene 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 Converge Technology with a short position of Mene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Technology and Mene.
Diversification Opportunities for Converge Technology and Mene
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Converge and Mene is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Converge Technology Solutions and Mene Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mene Inc and Converge Technology 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 Converge Technology Solutions are associated (or correlated) with Mene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mene Inc has no effect on the direction of Converge Technology i.e., Converge Technology and Mene go up and down completely randomly.
Pair Corralation between Converge Technology and Mene
Assuming the 90 days trading horizon Converge Technology Solutions is expected to generate 0.46 times more return on investment than Mene. However, Converge Technology Solutions is 2.17 times less risky than Mene. It trades about -0.01 of its potential returns per unit of risk. Mene Inc is currently generating about -0.02 per unit of risk. If you would invest 401.00 in Converge Technology Solutions on August 31, 2024 and sell it today you would lose (71.00) from holding Converge Technology Solutions or give up 17.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Converge Technology Solutions vs. Mene Inc
Performance |
| Timeline |
| Converge Technology |
| Mene Inc |
Converge Technology and Mene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Converge Technology and Mene
The main advantage of trading using opposite Converge Technology and Mene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Technology position performs unexpectedly, Mene 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 Mene will offset losses from the drop in Mene's long position.| Converge Technology vs. Mene Inc | Converge Technology vs. Africa Oil Corp | Converge Technology vs. Financial 15 Split | Converge Technology vs. Rubicon Organics |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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