Correlation Between Made Tech and St Galler
Can any of the company-specific risk be diversified away by investing in both Made Tech and St Galler 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 Made Tech and St Galler into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Made Tech Group and St Galler Kantonalbank, you can compare the effects of market volatilities on Made Tech and St Galler 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 Made Tech with a short position of St Galler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Made Tech and St Galler.
Diversification Opportunities for Made Tech and St Galler
Poor diversification
The 3 months correlation between Made and 0QQZ is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group and St Galler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Galler Kantonalbank and Made Tech 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 Made Tech Group are associated (or correlated) with St Galler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Galler Kantonalbank has no effect on the direction of Made Tech i.e., Made Tech and St Galler go up and down completely randomly.
Pair Corralation between Made Tech and St Galler
Assuming the 90 days trading horizon Made Tech Group is expected to generate 6.07 times more return on investment than St Galler. However, Made Tech is 6.07 times more volatile than St Galler Kantonalbank. It trades about 0.02 of its potential returns per unit of risk. St Galler Kantonalbank is currently generating about -0.02 per unit of risk. If you would invest 2,750 in Made Tech Group on October 19, 2024 and sell it today you would lose (225.00) from holding Made Tech Group or give up 8.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Made Tech Group vs. St Galler Kantonalbank
Performance |
| Timeline |
| Made Tech Group |
| St Galler Kantonalbank |
Made Tech and St Galler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Made Tech and St Galler
The main advantage of trading using opposite Made Tech and St Galler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech position performs unexpectedly, St Galler 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 St Galler will offset losses from the drop in St Galler's long position.| Made Tech vs. Symphony Environmental Technologies | Made Tech vs. Livermore Investments Group | Made Tech vs. Ashtead Technology Holdings | Made Tech vs. EJF Investments |
| St Galler vs. Walmart | St Galler vs. BYD Co | St Galler vs. Volkswagen AG | St Galler vs. Volkswagen AG Non Vtg |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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