Correlation Between Winner Group and Megachem Public

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

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

Diversification Opportunities for Winner Group and Megachem Public

0.71

Correlation Coefficient

Winner Group  Megachem Public

Poor diversification

The 3 months correlation between Winner and Megachem is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Winner Group Enterprise and Megachem Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Megachem Public and Winner Group 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 Winner Group Enterprise are associated (or correlated) with Megachem Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Megachem Public has no effect on the direction of Winner Group i.e., Winner Group and Megachem Public go up and down completely randomly.

Pair Corralation between Winner Group and Megachem Public

Assuming the 90 days trading horizon Winner Group Enterprise is expected to under-perform the Megachem Public. But the stock apears to be less risky and, when comparing its historical volatility, Winner Group Enterprise is 1.48 times less risky than Megachem Public. The stock trades about -0.08 of its potential returns per unit of risk. The Megachem Public is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  197.00  in Megachem Public on October 4, 2024 and sell it today you would earn a total of  3.00  from holding Megachem Public or generate 1.52% return on investment over 90 days.

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

Winner Group Enterprise  vs.  Megachem Public

Winner Group Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

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

Megachem Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Megachem Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Winner Group and Megachem Public

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

The idea behind Winner Group Enterprise and Megachem Public 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.