Correlation Between Mega Matrix and McGrath RentCorp
Can any of the company-specific risk be diversified away by investing in both Mega Matrix and McGrath RentCorp 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 Mega Matrix and McGrath RentCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mega Matrix Corp and McGrath RentCorp, you can compare the effects of market volatilities on Mega Matrix and McGrath RentCorp 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 Mega Matrix with a short position of McGrath RentCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mega Matrix and McGrath RentCorp.
Diversification Opportunities for Mega Matrix and McGrath RentCorp
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mega and McGrath is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Mega Matrix Corp and McGrath RentCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McGrath RentCorp and Mega Matrix 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 Mega Matrix Corp are associated (or correlated) with McGrath RentCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McGrath RentCorp has no effect on the direction of Mega Matrix i.e., Mega Matrix and McGrath RentCorp go up and down completely randomly.
Pair Corralation between Mega Matrix and McGrath RentCorp
Considering the 90-day investment horizon Mega Matrix Corp is expected to generate 4.0 times more return on investment than McGrath RentCorp. However, Mega Matrix is 4.0 times more volatile than McGrath RentCorp. It trades about 0.05 of its potential returns per unit of risk. McGrath RentCorp is currently generating about 0.06 per unit of risk. If you would invest 122.00 in Mega Matrix Corp on August 24, 2024 and sell it today you would earn a total of 41.00 from holding Mega Matrix Corp or generate 33.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mega Matrix Corp vs. McGrath RentCorp
Performance |
| Timeline |
| Mega Matrix Corp |
| McGrath RentCorp |
Mega Matrix and McGrath RentCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mega Matrix and McGrath RentCorp
The main advantage of trading using opposite Mega Matrix and McGrath RentCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mega Matrix position performs unexpectedly, McGrath RentCorp 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 McGrath RentCorp will offset losses from the drop in McGrath RentCorp's long position.| Mega Matrix vs. Virco Manufacturing | Mega Matrix vs. Bluerock Homes Trust | Mega Matrix vs. JBG SMITH Properties | Mega Matrix vs. Femasys |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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