Correlation Between Radiant Globaltech and MQ Technology

Can any of the company-specific risk be diversified away by investing in both Radiant Globaltech and MQ Technology 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 Radiant Globaltech and MQ Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Radiant Globaltech Bhd and MQ Technology Bhd, you can compare the effects of market volatilities on Radiant Globaltech and MQ Technology 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 Radiant Globaltech with a short position of MQ Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radiant Globaltech and MQ Technology.

Diversification Opportunities for Radiant Globaltech and MQ Technology

-0.13

Correlation Coefficient

Radiant Globaltech  MQ Technology

Good diversification

The 3 months correlation between Radiant and 0070 is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Radiant Globaltech Bhd and MQ Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MQ Technology Bhd and Radiant Globaltech 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 Radiant Globaltech Bhd are associated (or correlated) with MQ Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MQ Technology Bhd has no effect on the direction of Radiant Globaltech i.e., Radiant Globaltech and MQ Technology go up and down completely randomly.

Pair Corralation between Radiant Globaltech and MQ Technology

Assuming the 90 days trading horizon Radiant Globaltech is expected to generate 35.96 times less return on investment than MQ Technology. But when comparing it to its historical volatility, Radiant Globaltech Bhd is 15.22 times less risky than MQ Technology. It trades about 0.04 of its potential returns per unit of risk. MQ Technology Bhd is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  25.00  in MQ Technology Bhd on October 9, 2024 and sell it today you would lose (14.00) from holding MQ Technology Bhd or give up 56.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.59%
Values	Daily Returns

Radiant Globaltech Bhd  vs.  MQ Technology Bhd

Radiant Globaltech Bhd

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Radiant Globaltech Bhd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Radiant Globaltech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MQ Technology Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MQ Technology Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Radiant Globaltech and MQ Technology

The main advantage of trading using opposite Radiant Globaltech and MQ Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radiant Globaltech position performs unexpectedly, MQ Technology 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 MQ Technology will offset losses from the drop in MQ Technology's long position.

The idea behind Radiant Globaltech Bhd and MQ Technology Bhd 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.