Correlation Between Megawide Construction and EEI Corp
Can any of the company-specific risk be diversified away by investing in both Megawide Construction and EEI Corp 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 Megawide Construction and EEI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Megawide Construction Corp and EEI Corp, you can compare the effects of market volatilities on Megawide Construction and EEI Corp 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 Megawide Construction with a short position of EEI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megawide Construction and EEI Corp.
Diversification Opportunities for Megawide Construction and EEI Corp
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Megawide and EEI is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Megawide Construction Corp and EEI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EEI Corp and Megawide Construction 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 Megawide Construction Corp are associated (or correlated) with EEI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EEI Corp has no effect on the direction of Megawide Construction i.e., Megawide Construction and EEI Corp go up and down completely randomly.
Pair Corralation between Megawide Construction and EEI Corp
Assuming the 90 days trading horizon Megawide Construction Corp is expected to generate 0.35 times more return on investment than EEI Corp. However, Megawide Construction Corp is 2.84 times less risky than EEI Corp. It trades about 0.43 of its potential returns per unit of risk. EEI Corp is currently generating about -0.18 per unit of risk. If you would invest 9,440 in Megawide Construction Corp on September 15, 2024 and sell it today you would earn a total of 350.00 from holding Megawide Construction Corp or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 43.48% |
| Values | Daily Returns |
Megawide Construction Corp vs. EEI Corp
Performance |
| Timeline |
| Megawide Construction |
| EEI Corp |
Megawide Construction and EEI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megawide Construction and EEI Corp
The main advantage of trading using opposite Megawide Construction and EEI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megawide Construction position performs unexpectedly, EEI Corp 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 EEI Corp will offset losses from the drop in EEI Corp's long position.| Megawide Construction vs. Converge Information Communications | Megawide Construction vs. Top Frontier Investment | Megawide Construction vs. Semirara Mining Corp | Megawide Construction vs. Globe Telecom |
| EEI Corp vs. Megawide Construction Corp | EEI Corp vs. Converge Information Communications | EEI Corp vs. Concepcion Industrial Corp | EEI Corp vs. Century Pacific Food |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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