Correlation Between MClean Technologies and TAS Offshore

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

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

Diversification Opportunities for MClean Technologies and TAS Offshore

0.03

Correlation Coefficient

MClean Technologies  TAS Offshore

Significant diversification

The 3 months correlation between MClean and TAS is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding MClean Technologies Bhd and TAS Offshore Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAS Offshore Bhd and MClean 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 MClean Technologies Bhd are associated (or correlated) with TAS Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAS Offshore Bhd has no effect on the direction of MClean Technologies i.e., MClean Technologies and TAS Offshore go up and down completely randomly.

Pair Corralation between MClean Technologies and TAS Offshore

Assuming the 90 days trading horizon MClean Technologies Bhd is expected to under-perform the TAS Offshore. In addition to that, MClean Technologies is 1.57 times more volatile than TAS Offshore Bhd. It trades about -0.03 of its total potential returns per unit of risk. TAS Offshore Bhd is currently generating about -0.04 per unit of volatility. If you would invest  63.00  in TAS Offshore Bhd on December 30, 2024 and sell it today you would lose (4.00) from holding TAS Offshore Bhd or give up 6.35% of portfolio value over 90 days.

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

MClean Technologies Bhd  vs.  TAS Offshore Bhd

MClean Technologies Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days MClean Technologies Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

TAS Offshore Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days TAS Offshore Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, TAS Offshore is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with MClean Technologies and TAS Offshore

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

The idea behind MClean Technologies Bhd and TAS Offshore Bhd 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.