Correlation Between Made Tech and Brunner Investment
Can any of the company-specific risk be diversified away by investing in both Made Tech and Brunner Investment 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 Brunner Investment 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 Brunner Investment Trust, you can compare the effects of market volatilities on Made Tech and Brunner Investment 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 Brunner Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Made Tech and Brunner Investment.
Diversification Opportunities for Made Tech and Brunner Investment
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Made and Brunner is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group and Brunner Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunner Investment Trust 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 Brunner Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunner Investment Trust has no effect on the direction of Made Tech i.e., Made Tech and Brunner Investment go up and down completely randomly.
Pair Corralation between Made Tech and Brunner Investment
Assuming the 90 days trading horizon Made Tech Group is expected to generate 4.2 times more return on investment than Brunner Investment. However, Made Tech is 4.2 times more volatile than Brunner Investment Trust. It trades about 0.17 of its potential returns per unit of risk. Brunner Investment Trust is currently generating about 0.12 per unit of risk. If you would invest 1,950 in Made Tech Group on September 4, 2024 and sell it today you would earn a total of 350.00 from holding Made Tech Group or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Made Tech Group vs. Brunner Investment Trust
Performance |
| Timeline |
| Made Tech Group |
| Brunner Investment Trust |
Made Tech and Brunner Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Made Tech and Brunner Investment
The main advantage of trading using opposite Made Tech and Brunner Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech position performs unexpectedly, Brunner Investment 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 Brunner Investment will offset losses from the drop in Brunner Investment's long position.| Made Tech vs. Samsung Electronics Co | Made Tech vs. Samsung Electronics Co | Made Tech vs. Hyundai Motor | Made Tech vs. Toyota Motor Corp |
| Brunner Investment vs. LPKF Laser Electronics | Brunner Investment vs. Vienna Insurance Group | Brunner Investment vs. MTI Wireless Edge | Brunner Investment vs. Compal Electronics GDR |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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