Correlation Between Hydrotek Public and Multibax Public
Can any of the company-specific risk be diversified away by investing in both Hydrotek Public and Multibax Public 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 Hydrotek Public and Multibax Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hydrotek Public and Multibax Public, you can compare the effects of market volatilities on Hydrotek Public and Multibax Public 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 Hydrotek Public with a short position of Multibax Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydrotek Public and Multibax Public.
Diversification Opportunities for Hydrotek Public and Multibax Public
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hydrotek and Multibax is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hydrotek Public and Multibax Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multibax Public and Hydrotek Public 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 Hydrotek Public are associated (or correlated) with Multibax Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multibax Public has no effect on the direction of Hydrotek Public i.e., Hydrotek Public and Multibax Public go up and down completely randomly.
Pair Corralation between Hydrotek Public and Multibax Public
Assuming the 90 days trading horizon Hydrotek Public is expected to under-perform the Multibax Public. In addition to that, Hydrotek Public is 3.62 times more volatile than Multibax Public. It trades about -0.15 of its total potential returns per unit of risk. Multibax Public is currently generating about -0.48 per unit of volatility. If you would invest 290.00 in Multibax Public on September 2, 2024 and sell it today you would lose (92.00) from holding Multibax Public or give up 31.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hydrotek Public vs. Multibax Public
Performance |
| Timeline |
| Hydrotek Public |
| Multibax Public |
Hydrotek Public and Multibax Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hydrotek Public and Multibax Public
The main advantage of trading using opposite Hydrotek Public and Multibax Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hydrotek Public position performs unexpectedly, Multibax Public 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 Multibax Public will offset losses from the drop in Multibax Public's long position.| Hydrotek Public vs. Power Solution Technologies | Hydrotek Public vs. Kingsmen CMTI Public | Hydrotek Public vs. Panjawattana Plastic Public | Hydrotek Public vs. Cho Thavee Public |
| Multibax Public vs. Kingsmen CMTI Public | Multibax Public vs. Project Planning Service | Multibax Public vs. Power Solution Technologies | Multibax Public vs. Hydrotek Public |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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