Correlation Between MTI Wireless and Air Products
Can any of the company-specific risk be diversified away by investing in both MTI Wireless and Air Products 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 MTI Wireless and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MTI Wireless Edge and Air Products Chemicals, you can compare the effects of market volatilities on MTI Wireless and Air Products 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 MTI Wireless with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTI Wireless and Air Products.
Diversification Opportunities for MTI Wireless and Air Products
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between MTI and Air is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding MTI Wireless Edge and Air Products Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products Chemicals and MTI Wireless 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 MTI Wireless Edge are associated (or correlated) with Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products Chemicals has no effect on the direction of MTI Wireless i.e., MTI Wireless and Air Products go up and down completely randomly.
Pair Corralation between MTI Wireless and Air Products
Assuming the 90 days trading horizon MTI Wireless Edge is expected to generate 1.9 times more return on investment than Air Products. However, MTI Wireless is 1.9 times more volatile than Air Products Chemicals. It trades about 0.1 of its potential returns per unit of risk. Air Products Chemicals is currently generating about -0.07 per unit of risk. If you would invest 5,100 in MTI Wireless Edge on November 28, 2024 and sell it today you would earn a total of 300.00 from holding MTI Wireless Edge or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MTI Wireless Edge vs. Air Products Chemicals
Performance |
| Timeline |
| MTI Wireless Edge |
| Air Products Chemicals |
MTI Wireless and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTI Wireless and Air Products
The main advantage of trading using opposite MTI Wireless and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTI Wireless position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| MTI Wireless vs. Eastinco Mining Exploration | MTI Wireless vs. Empire Metals Limited | MTI Wireless vs. Home Depot | MTI Wireless vs. Central Asia Metals |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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