Correlation Between MGO Global and Steel Connect
Can any of the company-specific risk be diversified away by investing in both MGO Global and Steel Connect 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 MGO Global and Steel Connect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGO Global Common and Steel Connect, you can compare the effects of market volatilities on MGO Global and Steel Connect 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 MGO Global with a short position of Steel Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGO Global and Steel Connect.
Diversification Opportunities for MGO Global and Steel Connect
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MGO and Steel is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding MGO Global Common and Steel Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Connect and MGO Global 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 MGO Global Common are associated (or correlated) with Steel Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Connect has no effect on the direction of MGO Global i.e., MGO Global and Steel Connect go up and down completely randomly.
Pair Corralation between MGO Global and Steel Connect
Given the investment horizon of 90 days MGO Global Common is expected to under-perform the Steel Connect. In addition to that, MGO Global is 3.65 times more volatile than Steel Connect. It trades about 0.0 of its total potential returns per unit of risk. Steel Connect is currently generating about 0.05 per unit of volatility. If you would invest 1,076 in Steel Connect on September 2, 2024 and sell it today you would earn a total of 170.00 from holding Steel Connect or generate 15.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGO Global Common vs. Steel Connect
Performance |
| Timeline |
| MGO Global Common |
| Steel Connect |
MGO Global and Steel Connect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGO Global and Steel Connect
The main advantage of trading using opposite MGO Global and Steel Connect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGO Global position performs unexpectedly, Steel Connect 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 Steel Connect will offset losses from the drop in Steel Connect's long position.| MGO Global vs. ADTRAN Inc | MGO Global vs. Belden Inc | MGO Global vs. ADC Therapeutics SA | MGO Global vs. Comtech Telecommunications Corp |
| Steel Connect vs. Baosheng Media Group | Steel Connect vs. Impact Fusion International | Steel Connect vs. Mirriad Advertising plc | Steel Connect vs. CyberAgent ADR |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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