Correlation Between Mega Lifesciences and Exotic Food
Can any of the company-specific risk be diversified away by investing in both Mega Lifesciences and Exotic Food 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 Exotic Food 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 Exotic Food Public, you can compare the effects of market volatilities on Mega Lifesciences and Exotic Food 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 Exotic Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mega Lifesciences and Exotic Food.
Diversification Opportunities for Mega Lifesciences and Exotic Food
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mega and Exotic is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mega Lifesciences Public and Exotic Food Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exotic Food 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 Exotic Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exotic Food Public has no effect on the direction of Mega Lifesciences i.e., Mega Lifesciences and Exotic Food go up and down completely randomly.
Pair Corralation between Mega Lifesciences and Exotic Food
Assuming the 90 days trading horizon Mega Lifesciences Public is expected to under-perform the Exotic Food. But the stock apears to be less risky and, when comparing its historical volatility, Mega Lifesciences Public is 2.06 times less risky than Exotic Food. The stock trades about -0.04 of its potential returns per unit of risk. The Exotic Food Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,192 in Exotic Food Public on August 28, 2024 and sell it today you would earn a total of 818.00 from holding Exotic Food Public or generate 68.62% 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. Exotic Food Public
Performance |
| Timeline |
| Mega Lifesciences Public |
| Exotic Food Public |
Mega Lifesciences and Exotic Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mega Lifesciences and Exotic Food
The main advantage of trading using opposite Mega Lifesciences and Exotic Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mega Lifesciences position performs unexpectedly, Exotic Food 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 Exotic Food will offset losses from the drop in Exotic Food'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 |
| Exotic Food vs. Mega Lifesciences Public | Exotic Food vs. Com7 PCL | Exotic Food vs. Thai Union Group | Exotic Food vs. Jay Mart 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |