Correlation Between Innovative Technology and MB Securities

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

By analyzing existing cross correlation between Innovative Technology Development and MB Securities JSC, you can compare the effects of market volatilities on Innovative Technology and MB Securities 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 Innovative Technology with a short position of MB Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Technology and MB Securities.

Diversification Opportunities for Innovative Technology and MB Securities

-0.46

Correlation Coefficient

Innovative Technology  MB Securities

Very good diversification

The 3 months correlation between Innovative and MBS is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Technology Developm and MB Securities JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MB Securities JSC and Innovative Technology 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 Innovative Technology Development are associated (or correlated) with MB Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MB Securities JSC has no effect on the direction of Innovative Technology i.e., Innovative Technology and MB Securities go up and down completely randomly.

Pair Corralation between Innovative Technology and MB Securities

Assuming the 90 days trading horizon Innovative Technology Development is expected to generate 0.94 times more return on investment than MB Securities. However, Innovative Technology Development is 1.06 times less risky than MB Securities. It trades about 0.09 of its potential returns per unit of risk. MB Securities JSC is currently generating about -0.06 per unit of risk. If you would invest  1,200,000  in Innovative Technology Development on September 28, 2024 and sell it today you would earn a total of  120,000  from holding Innovative Technology Development or generate 10.0% return on investment over 90 days.

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

Innovative Technology Developm  vs.  MB Securities JSC

Innovative Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Innovative Technology Development are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Innovative Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MB Securities JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MB Securities JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Innovative Technology and MB Securities

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

The idea behind Innovative Technology Development and MB Securities JSC 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.