Correlation Between MGT Capital and Cal-Bay Intl
Can any of the company-specific risk be diversified away by investing in both MGT Capital and Cal-Bay Intl 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 MGT Capital and Cal-Bay Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGT Capital Investments and Cal Bay Intl, you can compare the effects of market volatilities on MGT Capital and Cal-Bay Intl 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 MGT Capital with a short position of Cal-Bay Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGT Capital and Cal-Bay Intl.
Diversification Opportunities for MGT Capital and Cal-Bay Intl
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MGT and Cal-Bay is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MGT Capital Investments and Cal Bay Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Bay Intl and MGT Capital 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 MGT Capital Investments are associated (or correlated) with Cal-Bay Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Bay Intl has no effect on the direction of MGT Capital i.e., MGT Capital and Cal-Bay Intl go up and down completely randomly.
Pair Corralation between MGT Capital and Cal-Bay Intl
Given the investment horizon of 90 days MGT Capital is expected to generate 9.75 times less return on investment than Cal-Bay Intl. But when comparing it to its historical volatility, MGT Capital Investments is 4.64 times less risky than Cal-Bay Intl. It trades about 0.05 of its potential returns per unit of risk. Cal Bay Intl is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.03 in Cal Bay Intl on August 30, 2024 and sell it today you would lose (0.02) from holding Cal Bay Intl or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 31.11% |
| Values | Daily Returns |
MGT Capital Investments vs. Cal Bay Intl
Performance |
| Timeline |
| MGT Capital Investments |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cal Bay Intl |
MGT Capital and Cal-Bay Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGT Capital and Cal-Bay Intl
The main advantage of trading using opposite MGT Capital and Cal-Bay Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGT Capital position performs unexpectedly, Cal-Bay Intl 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 Cal-Bay Intl will offset losses from the drop in Cal-Bay Intl's long position.The idea behind MGT Capital Investments and Cal Bay Intl pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cal-Bay Intl vs. Boston Properties | Cal-Bay Intl vs. Kilroy Realty Corp | Cal-Bay Intl vs. SL Green Realty | Cal-Bay Intl vs. Vornado Realty Trust |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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