Correlation Between STI Education and Megawide Construction
Can any of the company-specific risk be diversified away by investing in both STI Education and Megawide Construction 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 STI Education and Megawide Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STI Education Systems and Megawide Construction Corp, you can compare the effects of market volatilities on STI Education and Megawide Construction 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 STI Education with a short position of Megawide Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of STI Education and Megawide Construction.
Diversification Opportunities for STI Education and Megawide Construction
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between STI and Megawide is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding STI Education Systems and Megawide Construction Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Megawide Construction and STI Education 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 STI Education Systems are associated (or correlated) with Megawide Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Megawide Construction has no effect on the direction of STI Education i.e., STI Education and Megawide Construction go up and down completely randomly.
Pair Corralation between STI Education and Megawide Construction
Assuming the 90 days trading horizon STI Education is expected to generate 1.88 times less return on investment than Megawide Construction. In addition to that, STI Education is 2.26 times more volatile than Megawide Construction Corp. It trades about 0.1 of its total potential returns per unit of risk. Megawide Construction Corp is currently generating about 0.43 per unit of volatility. If you would invest 9,440 in Megawide Construction Corp on September 13, 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 Together |
| Strength | Very Weak |
| Accuracy | 43.48% |
| Values | Daily Returns |
STI Education Systems vs. Megawide Construction Corp
Performance |
| Timeline |
| STI Education Systems |
| Megawide Construction |
STI Education and Megawide Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STI Education and Megawide Construction
The main advantage of trading using opposite STI Education and Megawide Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STI Education position performs unexpectedly, Megawide Construction 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 Megawide Construction will offset losses from the drop in Megawide Construction's long position.| STI Education vs. GT Capital Holdings | STI Education vs. Allhome Corp | STI Education vs. Jollibee Foods Corp | STI Education vs. LFM Properties Corp |
| Megawide Construction vs. Araneta Properties | Megawide Construction vs. GT Capital Holdings | Megawide Construction vs. Allhome Corp | Megawide Construction vs. Jollibee Foods Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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