Correlation Between Made Tech and Premier African
Can any of the company-specific risk be diversified away by investing in both Made Tech and Premier African 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 Premier African 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 Premier African Minerals, you can compare the effects of market volatilities on Made Tech and Premier African 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 Premier African. Check out your portfolio center. Please also check ongoing floating volatility patterns of Made Tech and Premier African.
Diversification Opportunities for Made Tech and Premier African
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Made and Premier is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group and Premier African Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier African Minerals 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 Premier African. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier African Minerals has no effect on the direction of Made Tech i.e., Made Tech and Premier African go up and down completely randomly.
Pair Corralation between Made Tech and Premier African
Assuming the 90 days trading horizon Made Tech Group is expected to generate 0.63 times more return on investment than Premier African. However, Made Tech Group is 1.6 times less risky than Premier African. It trades about 0.18 of its potential returns per unit of risk. Premier African Minerals is currently generating about -0.24 per unit of risk. If you would invest 2,250 in Made Tech Group on October 14, 2024 and sell it today you would earn a total of 225.00 from holding Made Tech Group or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Made Tech Group vs. Premier African Minerals
Performance |
| Timeline |
| Made Tech Group |
| Premier African Minerals |
Made Tech and Premier African Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Made Tech and Premier African
The main advantage of trading using opposite Made Tech and Premier African positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech position performs unexpectedly, Premier African 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 Premier African will offset losses from the drop in Premier African's long position.| Made Tech vs. Gamma Communications PLC | Made Tech vs. Teradata Corp | Made Tech vs. Zegona Communications Plc | Made Tech vs. Cairo Communication SpA |
| Premier African vs. Software Circle plc | Premier African vs. Polar Capital Technology | Premier African vs. Micron Technology | Premier African 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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