Correlation Between MKS Instruments and Novanta
Can any of the company-specific risk be diversified away by investing in both MKS Instruments and Novanta 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 MKS Instruments and Novanta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MKS Instruments and Novanta, you can compare the effects of market volatilities on MKS Instruments and Novanta 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 MKS Instruments with a short position of Novanta. Check out your portfolio center. Please also check ongoing floating volatility patterns of MKS Instruments and Novanta.
Diversification Opportunities for MKS Instruments and Novanta
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MKS and Novanta is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding MKS Instruments and Novanta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novanta and MKS Instruments 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 MKS Instruments are associated (or correlated) with Novanta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novanta has no effect on the direction of MKS Instruments i.e., MKS Instruments and Novanta go up and down completely randomly.
Pair Corralation between MKS Instruments and Novanta
Assuming the 90 days horizon MKS Instruments is expected to generate 1.37 times more return on investment than Novanta. However, MKS Instruments is 1.37 times more volatile than Novanta. It trades about 0.05 of its potential returns per unit of risk. Novanta is currently generating about 0.04 per unit of risk. If you would invest 10,184 in MKS Instruments on September 12, 2024 and sell it today you would earn a total of 641.00 from holding MKS Instruments or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MKS Instruments vs. Novanta
Performance |
| Timeline |
| MKS Instruments |
| Novanta |
MKS Instruments and Novanta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MKS Instruments and Novanta
The main advantage of trading using opposite MKS Instruments and Novanta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MKS Instruments position performs unexpectedly, Novanta 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 Novanta will offset losses from the drop in Novanta's long position.| MKS Instruments vs. HEXAGON AB ADR1 | MKS Instruments vs. Superior Plus Corp | MKS Instruments vs. SIVERS SEMICONDUCTORS AB | MKS Instruments vs. NorAm Drilling AS |
| Novanta vs. HEXAGON AB ADR1 | Novanta vs. Superior Plus Corp | Novanta vs. SIVERS SEMICONDUCTORS AB | Novanta vs. NorAm Drilling AS |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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