Correlation Between MPI and EGalaxeMPIA Technology
Can any of the company-specific risk be diversified away by investing in both MPI and EGalaxeMPIA 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 MPI and EGalaxeMPIA Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MPI Corporation and eGalaxeMPIA Technology, you can compare the effects of market volatilities on MPI and EGalaxeMPIA 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 MPI with a short position of EGalaxeMPIA Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPI and EGalaxeMPIA Technology.
Diversification Opportunities for MPI and EGalaxeMPIA Technology
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MPI and EGalaxeMPIA is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding MPI Corp. and eGalaxeMPIA Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eGalaxeMPIA Technology and MPI 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 MPI Corporation are associated (or correlated) with EGalaxeMPIA Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eGalaxeMPIA Technology has no effect on the direction of MPI i.e., MPI and EGalaxeMPIA Technology go up and down completely randomly.
Pair Corralation between MPI and EGalaxeMPIA Technology
Assuming the 90 days trading horizon MPI Corporation is expected to generate 3.6 times more return on investment than EGalaxeMPIA Technology. However, MPI is 3.6 times more volatile than eGalaxeMPIA Technology. It trades about 0.21 of its potential returns per unit of risk. eGalaxeMPIA Technology is currently generating about -0.54 per unit of risk. If you would invest 75,200 in MPI Corporation on September 25, 2024 and sell it today you would earn a total of 12,600 from holding MPI Corporation or generate 16.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MPI Corp. vs. eGalaxeMPIA Technology
Performance |
Timeline |
MPI Corporation |
eGalaxeMPIA Technology |
MPI and EGalaxeMPIA Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MPI and EGalaxeMPIA Technology
The main advantage of trading using opposite MPI and EGalaxeMPIA Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPI position performs unexpectedly, EGalaxeMPIA 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 EGalaxeMPIA Technology will offset losses from the drop in EGalaxeMPIA Technology's long position.MPI vs. Sino American Silicon Products | MPI vs. Formosa Sumco Technology | MPI vs. Radiant Opto Electronics Corp | MPI vs. Faraday Technology 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum |