Correlation Between Mega Matrix and Freightcar America
Can any of the company-specific risk be diversified away by investing in both Mega Matrix and Freightcar America 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 Freightcar America 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 Freightcar America, you can compare the effects of market volatilities on Mega Matrix and Freightcar America 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 Freightcar America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mega Matrix and Freightcar America.
Diversification Opportunities for Mega Matrix and Freightcar America
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mega and Freightcar is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Mega Matrix Corp and Freightcar America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freightcar America 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 Freightcar America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freightcar America has no effect on the direction of Mega Matrix i.e., Mega Matrix and Freightcar America go up and down completely randomly.
Pair Corralation between Mega Matrix and Freightcar America
Considering the 90-day investment horizon Mega Matrix Corp is expected to generate 0.48 times more return on investment than Freightcar America. However, Mega Matrix Corp is 2.09 times less risky than Freightcar America. It trades about 0.22 of its potential returns per unit of risk. Freightcar America is currently generating about -0.12 per unit of risk. If you would invest 149.00 in Mega Matrix Corp on August 30, 2024 and sell it today you would earn a total of 33.00 from holding Mega Matrix Corp or generate 22.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mega Matrix Corp vs. Freightcar America
Performance |
| Timeline |
| Mega Matrix Corp |
| Freightcar America |
Mega Matrix and Freightcar America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mega Matrix and Freightcar America
The main advantage of trading using opposite Mega Matrix and Freightcar America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mega Matrix position performs unexpectedly, Freightcar America 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 Freightcar America will offset losses from the drop in Freightcar America's long position.| Mega Matrix vs. Alta Equipment Group | Mega Matrix vs. McGrath RentCorp | Mega Matrix vs. Herc Holdings | Mega Matrix vs. HE Equipment Services |
| Freightcar America vs. Greenbrier Companies | Freightcar America vs. LB Foster | Freightcar America vs. Westinghouse Air Brake | Freightcar America vs. CSX Corporation |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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