Correlation Between MQGAU and SkyCity Entertainment

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Can any of the company-specific risk be diversified away by investing in both MQGAU and SkyCity Entertainment 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 MQGAU and SkyCity Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MQGAU 5376057 23 SEP 27 and SkyCity Entertainment Group, you can compare the effects of market volatilities on MQGAU and SkyCity Entertainment 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 MQGAU with a short position of SkyCity Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MQGAU and SkyCity Entertainment.

Diversification Opportunities for MQGAU and SkyCity Entertainment

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between MQGAU and SkyCity is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding MQGAU 5376057 23 SEP 27 and SkyCity Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SkyCity Entertainment and MQGAU 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 MQGAU 5376057 23 SEP 27 are associated (or correlated) with SkyCity Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SkyCity Entertainment has no effect on the direction of MQGAU i.e., MQGAU and SkyCity Entertainment go up and down completely randomly.

Pair Corralation between MQGAU and SkyCity Entertainment

Assuming the 90 days trading horizon MQGAU 5376057 23 SEP 27 is expected to generate 0.0 times more return on investment than SkyCity Entertainment. However, MQGAU 5376057 23 SEP 27 is 241.54 times less risky than SkyCity Entertainment. It trades about 0.35 of its potential returns per unit of risk. SkyCity Entertainment Group is currently generating about -0.22 per unit of risk. If you would invest  10,047  in MQGAU 5376057 23 SEP 27 on October 20, 2024 and sell it today you would earn a total of  4.00  from holding MQGAU 5376057 23 SEP 27 or generate 0.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy35.0%
ValuesDaily Returns

MQGAU 5376057 23 SEP 27  vs.  SkyCity Entertainment Group

 Performance 
       Timeline  
MQGAU 5376057 23 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in MQGAU 5376057 23 SEP 27 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, MQGAU is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
SkyCity Entertainment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SkyCity Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

MQGAU and SkyCity Entertainment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MQGAU and SkyCity Entertainment

The main advantage of trading using opposite MQGAU and SkyCity Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MQGAU position performs unexpectedly, SkyCity Entertainment 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 SkyCity Entertainment will offset losses from the drop in SkyCity Entertainment's long position.
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The idea behind MQGAU 5376057 23 SEP 27 and SkyCity Entertainment Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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