Correlation Between Mtar Technologies and State Bank

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

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

Diversification Opportunities for Mtar Technologies and State Bank

0.1

Correlation Coefficient

Mtar Technologies  State Bank

Average diversification

The 3 months correlation between Mtar and State is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mtar Technologies Limited and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank and Mtar Technologies 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 Mtar Technologies Limited are associated (or correlated) with State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of Mtar Technologies i.e., Mtar Technologies and State Bank go up and down completely randomly.

Pair Corralation between Mtar Technologies and State Bank

Assuming the 90 days trading horizon Mtar Technologies Limited is expected to under-perform the State Bank. In addition to that, Mtar Technologies is 2.03 times more volatile than State Bank of. It trades about -0.13 of its total potential returns per unit of risk. State Bank of is currently generating about -0.21 per unit of volatility. If you would invest  83,885  in State Bank of on September 29, 2024 and sell it today you would lose (3,920) from holding State Bank of or give up 4.67% of portfolio value over 90 days.

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

Mtar Technologies Limited  vs.  State Bank of

Mtar Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mtar Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Mtar Technologies is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

State Bank

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in State Bank of are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, State Bank is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mtar Technologies and State Bank

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

The idea behind Mtar Technologies Limited and State Bank of 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.