Correlation Between M Tron and Vicor
Can any of the company-specific risk be diversified away by investing in both M Tron and Vicor 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 M Tron and Vicor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M tron Industries and Vicor, you can compare the effects of market volatilities on M Tron and Vicor 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 M Tron with a short position of Vicor. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Tron and Vicor.
Diversification Opportunities for M Tron and Vicor
Very poor diversification
The 3 months correlation between MPTI and Vicor is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding M tron Industries and Vicor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicor and M Tron 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 M tron Industries are associated (or correlated) with Vicor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicor has no effect on the direction of M Tron i.e., M Tron and Vicor go up and down completely randomly.
Pair Corralation between M Tron and Vicor
Given the investment horizon of 90 days M tron Industries is expected to generate 1.05 times more return on investment than Vicor. However, M Tron is 1.05 times more volatile than Vicor. It trades about 0.3 of its potential returns per unit of risk. Vicor is currently generating about 0.21 per unit of risk. If you would invest 5,113 in M tron Industries on August 27, 2024 and sell it today you would earn a total of 1,494 from holding M tron Industries or generate 29.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
M tron Industries vs. Vicor
Performance |
| Timeline |
| M tron Industries |
| Vicor |
M Tron and Vicor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M Tron and Vicor
The main advantage of trading using opposite M Tron and Vicor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Tron position performs unexpectedly, Vicor 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 Vicor will offset losses from the drop in Vicor's long position.| M Tron vs. Ieh Corp | M Tron vs. Micropac Industries | M Tron vs. Deswell Industries | M Tron vs. Methode Electronics |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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