Correlation Between Made Tech and One Media
Can any of the company-specific risk be diversified away by investing in both Made Tech and One Media 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 One Media 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 One Media iP, you can compare the effects of market volatilities on Made Tech and One Media 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 One Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Made Tech and One Media.
Diversification Opportunities for Made Tech and One Media
Very weak diversification
The 3 months correlation between Made and One is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group and One Media iP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Media iP 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 One Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Media iP has no effect on the direction of Made Tech i.e., Made Tech and One Media go up and down completely randomly.
Pair Corralation between Made Tech and One Media
Assuming the 90 days trading horizon Made Tech Group is expected to generate 1.68 times more return on investment than One Media. However, Made Tech is 1.68 times more volatile than One Media iP. It trades about 0.01 of its potential returns per unit of risk. One Media iP is currently generating about 0.0 per unit of risk. If you would invest 3,475 in Made Tech Group on October 28, 2024 and sell it today you would lose (750.00) from holding Made Tech Group or give up 21.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Made Tech Group vs. One Media iP
Performance |
| Timeline |
| Made Tech Group |
| One Media iP |
Made Tech and One Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Made Tech and One Media
The main advantage of trading using opposite Made Tech and One Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech position performs unexpectedly, One Media 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 One Media will offset losses from the drop in One Media's long position.| Made Tech vs. Orient Telecoms | Made Tech vs. Cairo Communication SpA | Made Tech vs. Infrastrutture Wireless Italiane | Made Tech vs. Verizon Communications |
| One Media vs. CleanTech Lithium plc | One Media vs. Prosiebensat 1 Media | One Media vs. Ondine Biomedical | One Media vs. International Biotechnology Trust |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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