Correlation Between Schmitt Industries and MKS Instruments
Can any of the company-specific risk be diversified away by investing in both Schmitt Industries and MKS Instruments 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 Schmitt Industries and MKS Instruments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schmitt Industries and MKS Instruments, you can compare the effects of market volatilities on Schmitt Industries and MKS Instruments 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 Schmitt Industries with a short position of MKS Instruments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schmitt Industries and MKS Instruments.
Diversification Opportunities for Schmitt Industries and MKS Instruments
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Schmitt and MKS is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Schmitt Industries and MKS Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MKS Instruments and Schmitt Industries 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 Schmitt Industries are associated (or correlated) with MKS Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MKS Instruments has no effect on the direction of Schmitt Industries i.e., Schmitt Industries and MKS Instruments go up and down completely randomly.
Pair Corralation between Schmitt Industries and MKS Instruments
Given the investment horizon of 90 days Schmitt Industries is expected to generate 32.14 times more return on investment than MKS Instruments. However, Schmitt Industries is 32.14 times more volatile than MKS Instruments. It trades about 0.19 of its potential returns per unit of risk. MKS Instruments is currently generating about 0.04 per unit of risk. If you would invest 80.00 in Schmitt Industries on September 2, 2024 and sell it today you would lose (61.00) from holding Schmitt Industries or give up 76.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.06% |
| Values | Daily Returns |
Schmitt Industries vs. MKS Instruments
Performance |
| Timeline |
| Schmitt Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| MKS Instruments |
Schmitt Industries and MKS Instruments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schmitt Industries and MKS Instruments
The main advantage of trading using opposite Schmitt Industries and MKS Instruments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schmitt Industries position performs unexpectedly, MKS Instruments 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 MKS Instruments will offset losses from the drop in MKS Instruments' long position.| Schmitt Industries vs. Nanalysis Scientific Corp | Schmitt Industries vs. Genasys | Schmitt Industries vs. Kraken Robotics | Schmitt Industries vs. Mesa Laboratories |
| MKS Instruments vs. Vontier Corp | MKS Instruments vs. Teledyne Technologies Incorporated | MKS Instruments vs. ESCO Technologies | MKS Instruments vs. Sensata Technologies Holding |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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