Correlation Between Dynapack International and Macroblock

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

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

Diversification Opportunities for Dynapack International and Macroblock

-0.89

Correlation Coefficient

Dynapack International  Macroblock

Pay attention - limited upside

The 3 months correlation between Dynapack and Macroblock is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dynapack International Technol and Macroblock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macroblock and Dynapack International 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 Dynapack International Technology are associated (or correlated) with Macroblock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macroblock has no effect on the direction of Dynapack International i.e., Dynapack International and Macroblock go up and down completely randomly.

Pair Corralation between Dynapack International and Macroblock

Assuming the 90 days trading horizon Dynapack International Technology is expected to generate 2.08 times more return on investment than Macroblock. However, Dynapack International is 2.08 times more volatile than Macroblock. It trades about 0.32 of its potential returns per unit of risk. Macroblock is currently generating about -0.05 per unit of risk. If you would invest  12,100  in Dynapack International Technology on October 9, 2024 and sell it today you would earn a total of  9,350  from holding Dynapack International Technology or generate 77.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Dynapack International Technol  vs.  Macroblock

Dynapack International

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dynapack International Technology are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Dynapack International showed solid returns over the last few months and may actually be approaching a breakup point.

Macroblock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Macroblock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Macroblock is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Dynapack International and Macroblock

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

The idea behind Dynapack International Technology and Macroblock 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.