Correlation Between Galexxy Holdings and MGC Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Galexxy Holdings and MGC Pharmaceuticals 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 Galexxy Holdings and MGC Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galexxy Holdings and MGC Pharmaceuticals, you can compare the effects of market volatilities on Galexxy Holdings and MGC Pharmaceuticals 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 Galexxy Holdings with a short position of MGC Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galexxy Holdings and MGC Pharmaceuticals.
Diversification Opportunities for Galexxy Holdings and MGC Pharmaceuticals
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Galexxy and MGC is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Galexxy Holdings and MGC Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGC Pharmaceuticals and Galexxy Holdings 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 Galexxy Holdings are associated (or correlated) with MGC Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGC Pharmaceuticals has no effect on the direction of Galexxy Holdings i.e., Galexxy Holdings and MGC Pharmaceuticals go up and down completely randomly.
Pair Corralation between Galexxy Holdings and MGC Pharmaceuticals
Given the investment horizon of 90 days Galexxy Holdings is expected to generate 2.67 times more return on investment than MGC Pharmaceuticals. However, Galexxy Holdings is 2.67 times more volatile than MGC Pharmaceuticals. It trades about -0.04 of its potential returns per unit of risk. MGC Pharmaceuticals is currently generating about -0.18 per unit of risk. If you would invest 4.50 in Galexxy Holdings on August 29, 2024 and sell it today you would lose (3.37) from holding Galexxy Holdings or give up 74.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 23.81% |
| Values | Daily Returns |
Galexxy Holdings vs. MGC Pharmaceuticals
Performance |
| Timeline |
| Galexxy Holdings |
| MGC Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Galexxy Holdings and MGC Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galexxy Holdings and MGC Pharmaceuticals
The main advantage of trading using opposite Galexxy Holdings and MGC Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galexxy Holdings position performs unexpectedly, MGC Pharmaceuticals 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 MGC Pharmaceuticals will offset losses from the drop in MGC Pharmaceuticals' long position.| Galexxy Holdings vs. Genesis Electronics Group | Galexxy Holdings vs. Nextmart | Galexxy Holdings vs. Emergent Health Corp | Galexxy Holdings vs. Goff Corp |
| MGC Pharmaceuticals vs. Target Group | MGC Pharmaceuticals vs. Aequus Pharmaceuticals | MGC Pharmaceuticals vs. Filament Health Corp | MGC Pharmaceuticals vs. Sky Century Investment |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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