Correlation Between Corning Incorporated and MW Investment

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

By analyzing existing cross correlation between Corning Incorporated and MW Investment Holding, you can compare the effects of market volatilities on Corning Incorporated and MW Investment 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 Corning Incorporated with a short position of MW Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corning Incorporated and MW Investment.

Diversification Opportunities for Corning Incorporated and MW Investment

0.0

Correlation Coefficient

Corning Incorporated  MW Investment

Pay attention - limited upside

The 3 months correlation between Corning and MEGH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Corning Incorporated and MW Investment Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MW Investment Holding and Corning Incorporated 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 Corning Incorporated are associated (or correlated) with MW Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MW Investment Holding has no effect on the direction of Corning Incorporated i.e., Corning Incorporated and MW Investment go up and down completely randomly.

Pair Corralation between Corning Incorporated and MW Investment

Considering the 90-day investment horizon Corning Incorporated is expected to generate 16.27 times less return on investment than MW Investment. But when comparing it to its historical volatility, Corning Incorporated is 29.48 times less risky than MW Investment. It trades about 0.05 of its potential returns per unit of risk. MW Investment Holding is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  0.26  in MW Investment Holding on October 10, 2024 and sell it today you would lose (0.24) from holding MW Investment Holding or give up 92.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Corning Incorporated  vs.  MW Investment Holding

Corning Incorporated

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Corning Incorporated are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, Corning Incorporated is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

MW Investment Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MW Investment Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, MW Investment is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Corning Incorporated and MW Investment

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

The idea behind Corning Incorporated and MW Investment Holding 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.