Correlation Between Group 6 and Mach7 Technologies
Can any of the company-specific risk be diversified away by investing in both Group 6 and Mach7 Technologies 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 Group 6 and Mach7 Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Group 6 Metals and Mach7 Technologies, you can compare the effects of market volatilities on Group 6 and Mach7 Technologies 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 Group 6 with a short position of Mach7 Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 6 and Mach7 Technologies.
Diversification Opportunities for Group 6 and Mach7 Technologies
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Group and Mach7 is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Group 6 Metals and Mach7 Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mach7 Technologies and Group 6 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 Group 6 Metals are associated (or correlated) with Mach7 Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mach7 Technologies has no effect on the direction of Group 6 i.e., Group 6 and Mach7 Technologies go up and down completely randomly.
Pair Corralation between Group 6 and Mach7 Technologies
If you would invest 2.50 in Group 6 Metals on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Group 6 Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Group 6 Metals vs. Mach7 Technologies
Performance |
| Timeline |
| Group 6 Metals |
| Mach7 Technologies |
Group 6 and Mach7 Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group 6 and Mach7 Technologies
The main advantage of trading using opposite Group 6 and Mach7 Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 6 position performs unexpectedly, Mach7 Technologies 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 Mach7 Technologies will offset losses from the drop in Mach7 Technologies' long position.| Group 6 vs. Northern Star Resources | Group 6 vs. Evolution Mining | Group 6 vs. Bluescope Steel | Group 6 vs. Sandfire Resources NL |
| Mach7 Technologies vs. Regis Healthcare | Mach7 Technologies vs. Health and Plant | Mach7 Technologies vs. American West Metals | Mach7 Technologies vs. Group 6 Metals |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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