Correlation Between Megachem Public and Ekachai Medical
Can any of the company-specific risk be diversified away by investing in both Megachem Public and Ekachai Medical 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 Megachem Public and Ekachai Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Megachem Public and Ekachai Medical Care, you can compare the effects of market volatilities on Megachem Public and Ekachai Medical 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 Megachem Public with a short position of Ekachai Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megachem Public and Ekachai Medical.
Diversification Opportunities for Megachem Public and Ekachai Medical
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Megachem and Ekachai is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Megachem Public and Ekachai Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekachai Medical Care and Megachem Public 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 Megachem Public are associated (or correlated) with Ekachai Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekachai Medical Care has no effect on the direction of Megachem Public i.e., Megachem Public and Ekachai Medical go up and down completely randomly.
Pair Corralation between Megachem Public and Ekachai Medical
Assuming the 90 days trading horizon Megachem Public is expected to under-perform the Ekachai Medical. In addition to that, Megachem Public is 2.34 times more volatile than Ekachai Medical Care. It trades about -0.18 of its total potential returns per unit of risk. Ekachai Medical Care is currently generating about -0.05 per unit of volatility. If you would invest 665.00 in Ekachai Medical Care on August 25, 2024 and sell it today you would lose (15.00) from holding Ekachai Medical Care or give up 2.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Megachem Public vs. Ekachai Medical Care
Performance |
| Timeline |
| Megachem Public |
| Ekachai Medical Care |
Megachem Public and Ekachai Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megachem Public and Ekachai Medical
The main advantage of trading using opposite Megachem Public and Ekachai Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megachem Public position performs unexpectedly, Ekachai Medical 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 Ekachai Medical will offset losses from the drop in Ekachai Medical's long position.| Megachem Public vs. Lalin Property Public | Megachem Public vs. Information and Communication | Megachem Public vs. MCS Steel Public | Megachem Public vs. Mega Lifesciences Public |
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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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