Correlation Between Mega Lifesciences and Ichitan Group
Can any of the company-specific risk be diversified away by investing in both Mega Lifesciences and Ichitan Group 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 Mega Lifesciences and Ichitan Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mega Lifesciences Public and Ichitan Group Public, you can compare the effects of market volatilities on Mega Lifesciences and Ichitan Group 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 Mega Lifesciences with a short position of Ichitan Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mega Lifesciences and Ichitan Group.
Diversification Opportunities for Mega Lifesciences and Ichitan Group
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mega and Ichitan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Mega Lifesciences Public and Ichitan Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichitan Group Public and Mega Lifesciences 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 Mega Lifesciences Public are associated (or correlated) with Ichitan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichitan Group Public has no effect on the direction of Mega Lifesciences i.e., Mega Lifesciences and Ichitan Group go up and down completely randomly.
Pair Corralation between Mega Lifesciences and Ichitan Group
Assuming the 90 days trading horizon Mega Lifesciences Public is expected to under-perform the Ichitan Group. But the stock apears to be less risky and, when comparing its historical volatility, Mega Lifesciences Public is 1.28 times less risky than Ichitan Group. The stock trades about -0.03 of its potential returns per unit of risk. The Ichitan Group Public is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,429 in Ichitan Group Public on September 12, 2024 and sell it today you would earn a total of 71.00 from holding Ichitan Group Public or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mega Lifesciences Public vs. Ichitan Group Public
Performance |
| Timeline |
| Mega Lifesciences Public |
| Ichitan Group Public |
Mega Lifesciences and Ichitan Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mega Lifesciences and Ichitan Group
The main advantage of trading using opposite Mega Lifesciences and Ichitan Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mega Lifesciences position performs unexpectedly, Ichitan Group 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 Ichitan Group will offset losses from the drop in Ichitan Group's long position.| Mega Lifesciences vs. Home Product Center | Mega Lifesciences vs. Minor International Public | Mega Lifesciences vs. Com7 PCL | Mega Lifesciences vs. Bangkok Dusit Medical |
| Ichitan Group vs. Carabao Group Public | Ichitan Group vs. Taokaenoi Food Marketing | Ichitan Group vs. Home Product Center | Ichitan Group vs. Thai Union Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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