Correlation Between Cameo Communications and Magnate Technology
Can any of the company-specific risk be diversified away by investing in both Cameo Communications and Magnate 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 Cameo Communications and Magnate Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cameo Communications and Magnate Technology Co, you can compare the effects of market volatilities on Cameo Communications and Magnate 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 Cameo Communications with a short position of Magnate Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cameo Communications and Magnate Technology.
Diversification Opportunities for Cameo Communications and Magnate Technology
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cameo and Magnate is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cameo Communications and Magnate Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnate Technology and Cameo Communications 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 Cameo Communications are associated (or correlated) with Magnate Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnate Technology has no effect on the direction of Cameo Communications i.e., Cameo Communications and Magnate Technology go up and down completely randomly.
Pair Corralation between Cameo Communications and Magnate Technology
Assuming the 90 days trading horizon Cameo Communications is expected to under-perform the Magnate Technology. But the stock apears to be less risky and, when comparing its historical volatility, Cameo Communications is 2.38 times less risky than Magnate Technology. The stock trades about -0.13 of its potential returns per unit of risk. The Magnate Technology Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,655 in Magnate Technology Co on December 30, 2024 and sell it today you would earn a total of 1,675 from holding Magnate Technology Co or generate 45.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cameo Communications vs. Magnate Technology Co
Performance |
Timeline |
Cameo Communications |
Magnate Technology |
Cameo Communications and Magnate Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cameo Communications and Magnate Technology
The main advantage of trading using opposite Cameo Communications and Magnate Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cameo Communications position performs unexpectedly, Magnate 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 Magnate Technology will offset losses from the drop in Magnate Technology's long position.Cameo Communications vs. Gemtek Technology Co | Cameo Communications vs. CyberTAN Technology | Cameo Communications vs. Alpha Networks | Cameo Communications vs. D Link Corp |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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