Correlation Between Made Tech and BH Macro
Can any of the company-specific risk be diversified away by investing in both Made Tech and BH Macro 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 BH Macro 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 BH Macro Limited, you can compare the effects of market volatilities on Made Tech and BH Macro 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 BH Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Made Tech and BH Macro.
Diversification Opportunities for Made Tech and BH Macro
Poor diversification
The 3 months correlation between Made and BHMU is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group and BH Macro Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BH Macro Limited 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 BH Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BH Macro Limited has no effect on the direction of Made Tech i.e., Made Tech and BH Macro go up and down completely randomly.
Pair Corralation between Made Tech and BH Macro
Assuming the 90 days trading horizon Made Tech Group is expected to generate 3.88 times more return on investment than BH Macro. However, Made Tech is 3.88 times more volatile than BH Macro Limited. It trades about 0.24 of its potential returns per unit of risk. BH Macro Limited is currently generating about 0.14 per unit of risk. If you would invest 1,800 in Made Tech Group on September 1, 2024 and sell it today you would earn a total of 500.00 from holding Made Tech Group or generate 27.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Made Tech Group vs. BH Macro Limited
Performance |
| Timeline |
| Made Tech Group |
| BH Macro Limited |
Made Tech and BH Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Made Tech and BH Macro
The main advantage of trading using opposite Made Tech and BH Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech position performs unexpectedly, BH Macro 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 BH Macro will offset losses from the drop in BH Macro's long position.| Made Tech vs. Ironveld Plc | Made Tech vs. Aberdeen Diversified Income | Made Tech vs. Tata Steel Limited | Made Tech vs. Federal Realty Investment |
| BH Macro vs. PureTech Health plc | BH Macro vs. Blackstone Loan Financing | BH Macro vs. Sunny Optical Technology | BH Macro vs. Made Tech Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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