Correlation Between Group 6 and Midway
Can any of the company-specific risk be diversified away by investing in both Group 6 and Midway 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 Midway 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 Midway, you can compare the effects of market volatilities on Group 6 and Midway 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 Midway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 6 and Midway.
Diversification Opportunities for Group 6 and Midway
Significant diversification
The 3 months correlation between Group and Midway is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Group 6 Metals and Midway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midway 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 Midway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midway has no effect on the direction of Group 6 i.e., Group 6 and Midway go up and down completely randomly.
Pair Corralation between Group 6 and Midway
Assuming the 90 days trading horizon Group 6 Metals is expected to under-perform the Midway. In addition to that, Group 6 is 1.33 times more volatile than Midway. It trades about -0.04 of its total potential returns per unit of risk. Midway is currently generating about 0.03 per unit of volatility. If you would invest 88.00 in Midway on September 14, 2024 and sell it today you would earn a total of 37.00 from holding Midway or generate 42.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Group 6 Metals vs. Midway
Performance |
| Timeline |
| Group 6 Metals |
| Midway |
Group 6 and Midway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group 6 and Midway
The main advantage of trading using opposite Group 6 and Midway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 6 position performs unexpectedly, Midway 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 Midway will offset losses from the drop in Midway's long position.| Group 6 vs. Insignia Financial | Group 6 vs. Pioneer Credit | Group 6 vs. Legacy Iron Ore | Group 6 vs. Tombador Iron |
| Midway vs. TPG Telecom | Midway vs. Group 6 Metals | Midway vs. K2 Asset Management | Midway vs. Falcon 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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