Correlation Between Mega Lifesciences and Jay Mart
Can any of the company-specific risk be diversified away by investing in both Mega Lifesciences and Jay Mart 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 Jay Mart 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 Jay Mart Public, you can compare the effects of market volatilities on Mega Lifesciences and Jay Mart 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 Jay Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mega Lifesciences and Jay Mart.
Diversification Opportunities for Mega Lifesciences and Jay Mart
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mega and Jay is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mega Lifesciences Public and Jay Mart Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jay Mart 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 Jay Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jay Mart Public has no effect on the direction of Mega Lifesciences i.e., Mega Lifesciences and Jay Mart go up and down completely randomly.
Pair Corralation between Mega Lifesciences and Jay Mart
Assuming the 90 days trading horizon Mega Lifesciences Public is expected to generate 0.69 times more return on investment than Jay Mart. However, Mega Lifesciences Public is 1.46 times less risky than Jay Mart. It trades about -0.18 of its potential returns per unit of risk. Jay Mart Public is currently generating about -0.15 per unit of risk. If you would invest 3,925 in Mega Lifesciences Public on August 29, 2024 and sell it today you would lose (525.00) from holding Mega Lifesciences Public or give up 13.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mega Lifesciences Public vs. Jay Mart Public
Performance |
| Timeline |
| Mega Lifesciences Public |
| Jay Mart Public |
Mega Lifesciences and Jay Mart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mega Lifesciences and Jay Mart
The main advantage of trading using opposite Mega Lifesciences and Jay Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mega Lifesciences position performs unexpectedly, Jay Mart 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 Jay Mart will offset losses from the drop in Jay Mart'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 |
| Jay Mart vs. AP Public | Jay Mart vs. Jasmine International Public | Jay Mart vs. Asia Plus Group | Jay Mart vs. Bangchak 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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