Correlation Between Made Tech and Ferrexpo PLC
Can any of the company-specific risk be diversified away by investing in both Made Tech and Ferrexpo PLC 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 Ferrexpo PLC 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 Ferrexpo PLC, you can compare the effects of market volatilities on Made Tech and Ferrexpo PLC 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 Ferrexpo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Made Tech and Ferrexpo PLC.
Diversification Opportunities for Made Tech and Ferrexpo PLC
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Made and Ferrexpo is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group and Ferrexpo PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrexpo PLC 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 Ferrexpo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrexpo PLC has no effect on the direction of Made Tech i.e., Made Tech and Ferrexpo PLC go up and down completely randomly.
Pair Corralation between Made Tech and Ferrexpo PLC
Assuming the 90 days trading horizon Made Tech Group is expected to generate 0.49 times more return on investment than Ferrexpo PLC. However, Made Tech Group is 2.03 times less risky than Ferrexpo PLC. It trades about 0.17 of its potential returns per unit of risk. Ferrexpo PLC is currently generating about -0.06 per unit of risk. If you would invest 2,500 in Made Tech Group on October 26, 2024 and sell it today you would earn a total of 170.00 from holding Made Tech Group or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Made Tech Group vs. Ferrexpo PLC
Performance |
| Timeline |
| Made Tech Group |
| Ferrexpo PLC |
Made Tech and Ferrexpo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Made Tech and Ferrexpo PLC
The main advantage of trading using opposite Made Tech and Ferrexpo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech position performs unexpectedly, Ferrexpo PLC 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 Ferrexpo PLC will offset losses from the drop in Ferrexpo PLC's long position.| Made Tech vs. Check Point Software | Made Tech vs. JD Sports Fashion | Made Tech vs. Axway Software SA | Made Tech vs. Austevoll Seafood ASA |
| Ferrexpo PLC vs. Made Tech Group | Ferrexpo PLC vs. Check Point Software | Ferrexpo PLC vs. Playtech Plc | Ferrexpo PLC vs. Costco Wholesale Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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