Correlation Between Audix Corp and Mirle Automation

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

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

Diversification Opportunities for Audix Corp and Mirle Automation

-0.08

Correlation Coefficient

Audix Corp  Mirle Automation

Good diversification

The 3 months correlation between Audix and Mirle is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Audix Corp and Mirle Automation Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirle Automation Corp and Audix Corp 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 Audix Corp are associated (or correlated) with Mirle Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirle Automation Corp has no effect on the direction of Audix Corp i.e., Audix Corp and Mirle Automation go up and down completely randomly.

Pair Corralation between Audix Corp and Mirle Automation

Assuming the 90 days trading horizon Audix Corp is expected to generate 4947.0 times less return on investment than Mirle Automation. But when comparing it to its historical volatility, Audix Corp is 18.08 times less risky than Mirle Automation. It trades about 0.0 of its potential returns per unit of risk. Mirle Automation Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  7,310  in Mirle Automation Corp on October 11, 2024 and sell it today you would earn a total of  750.00  from holding Mirle Automation Corp or generate 10.26% return on investment over 90 days.

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

Audix Corp  vs.  Mirle Automation Corp

Audix Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Audix Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Audix Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Mirle Automation Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mirle Automation Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Mirle Automation is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Audix Corp and Mirle Automation

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

The idea behind Audix Corp and Mirle Automation Corp 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.