Correlation Between Made Tech and Neometals
Can any of the company-specific risk be diversified away by investing in both Made Tech and Neometals 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 Neometals 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 Neometals, you can compare the effects of market volatilities on Made Tech and Neometals 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 Neometals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Made Tech and Neometals.
Diversification Opportunities for Made Tech and Neometals
Very good diversification
The 3 months correlation between Made and Neometals is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group and Neometals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neometals 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 Neometals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neometals has no effect on the direction of Made Tech i.e., Made Tech and Neometals go up and down completely randomly.
Pair Corralation between Made Tech and Neometals
Assuming the 90 days trading horizon Made Tech Group is expected to generate 0.83 times more return on investment than Neometals. However, Made Tech Group is 1.21 times less risky than Neometals. It trades about 0.1 of its potential returns per unit of risk. Neometals is currently generating about -0.02 per unit of risk. If you would invest 1,850 in Made Tech Group on September 2, 2024 and sell it today you would earn a total of 450.00 from holding Made Tech Group or generate 24.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Made Tech Group vs. Neometals
Performance |
| Timeline |
| Made Tech Group |
| Neometals |
Made Tech and Neometals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Made Tech and Neometals
The main advantage of trading using opposite Made Tech and Neometals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech position performs unexpectedly, Neometals 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 Neometals will offset losses from the drop in Neometals' long position.| Made Tech vs. Kaufman Et Broad | Made Tech vs. EVS Broadcast Equipment | Made Tech vs. Ecclesiastical Insurance Office | Made Tech vs. Gaztransport et Technigaz |
| Neometals vs. Jacquet Metal Service | Neometals vs. AfriTin Mining | Neometals vs. Norman Broadbent Plc | Neometals vs. Darden Restaurants |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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