Correlation Between Memscap Regpt and Bassac

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

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

Diversification Opportunities for Memscap Regpt and Bassac

-0.3

Correlation Coefficient

Memscap Regpt  Bassac

Very good diversification

The 3 months correlation between Memscap and Bassac is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Memscap Regpt and Bassac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bassac and Memscap Regpt 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 Memscap Regpt are associated (or correlated) with Bassac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bassac has no effect on the direction of Memscap Regpt i.e., Memscap Regpt and Bassac go up and down completely randomly.

Pair Corralation between Memscap Regpt and Bassac

Assuming the 90 days trading horizon Memscap Regpt is expected to generate 2.05 times more return on investment than Bassac. However, Memscap Regpt is 2.05 times more volatile than Bassac. It trades about 0.03 of its potential returns per unit of risk. Bassac is currently generating about -0.02 per unit of risk. If you would invest  463.00  in Memscap Regpt on September 28, 2024 and sell it today you would earn a total of  9.00  from holding Memscap Regpt or generate 1.94% return on investment over 90 days.

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

Memscap Regpt  vs.  Bassac

Memscap Regpt

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Memscap Regpt are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Memscap Regpt may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bassac

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bassac has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bassac is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Memscap Regpt and Bassac

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

The idea behind Memscap Regpt and Bassac 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 Global Correlations module to find global opportunities by holding instruments from different markets.