Correlation Between Integrated Micro and Megawide Construction
Can any of the company-specific risk be diversified away by investing in both Integrated Micro and Megawide Construction 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 Integrated Micro and Megawide Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Micro Electronics and Megawide Construction Corp, you can compare the effects of market volatilities on Integrated Micro and Megawide Construction 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 Integrated Micro with a short position of Megawide Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Micro and Megawide Construction.
Diversification Opportunities for Integrated Micro and Megawide Construction
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Integrated and Megawide is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Micro Electronics and Megawide Construction Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Megawide Construction and Integrated Micro 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 Integrated Micro Electronics are associated (or correlated) with Megawide Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Megawide Construction has no effect on the direction of Integrated Micro i.e., Integrated Micro and Megawide Construction go up and down completely randomly.
Pair Corralation between Integrated Micro and Megawide Construction
Assuming the 90 days trading horizon Integrated Micro Electronics is expected to under-perform the Megawide Construction. In addition to that, Integrated Micro is 3.56 times more volatile than Megawide Construction Corp. It trades about -0.05 of its total potential returns per unit of risk. Megawide Construction Corp is currently generating about 0.43 per unit of volatility. If you would invest 9,440 in Megawide Construction Corp on September 13, 2024 and sell it today you would earn a total of 350.00 from holding Megawide Construction Corp or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 43.48% |
| Values | Daily Returns |
Integrated Micro Electronics vs. Megawide Construction Corp
Performance |
| Timeline |
| Integrated Micro Ele |
| Megawide Construction |
Integrated Micro and Megawide Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Micro and Megawide Construction
The main advantage of trading using opposite Integrated Micro and Megawide Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Micro position performs unexpectedly, Megawide Construction 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 Megawide Construction will offset losses from the drop in Megawide Construction's long position.| Integrated Micro vs. GT Capital Holdings | Integrated Micro vs. Allhome Corp | Integrated Micro vs. Jollibee Foods Corp | Integrated Micro vs. LFM Properties Corp |
| Megawide Construction vs. Araneta Properties | Megawide Construction vs. GT Capital Holdings | Megawide Construction vs. Allhome Corp | Megawide Construction vs. Jollibee Foods Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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