Correlation Between Mirle Automation and Zeng Hsing
Can any of the company-specific risk be diversified away by investing in both Mirle Automation and Zeng Hsing 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 Mirle Automation and Zeng Hsing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mirle Automation Corp and Zeng Hsing Industrial, you can compare the effects of market volatilities on Mirle Automation and Zeng Hsing 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 Mirle Automation with a short position of Zeng Hsing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirle Automation and Zeng Hsing.
Diversification Opportunities for Mirle Automation and Zeng Hsing
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mirle and Zeng is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mirle Automation Corp and Zeng Hsing Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zeng Hsing Industrial and Mirle Automation 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 Mirle Automation Corp are associated (or correlated) with Zeng Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zeng Hsing Industrial has no effect on the direction of Mirle Automation i.e., Mirle Automation and Zeng Hsing go up and down completely randomly.
Pair Corralation between Mirle Automation and Zeng Hsing
Assuming the 90 days trading horizon Mirle Automation is expected to generate 2.51 times less return on investment than Zeng Hsing. In addition to that, Mirle Automation is 2.04 times more volatile than Zeng Hsing Industrial. It trades about 0.01 of its total potential returns per unit of risk. Zeng Hsing Industrial is currently generating about 0.04 per unit of volatility. If you would invest 10,250 in Zeng Hsing Industrial on September 15, 2024 and sell it today you would earn a total of 100.00 from holding Zeng Hsing Industrial or generate 0.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Mirle Automation Corp vs. Zeng Hsing Industrial
Performance |
Timeline |
Mirle Automation Corp |
Zeng Hsing Industrial |
Mirle Automation and Zeng Hsing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mirle Automation and Zeng Hsing
The main advantage of trading using opposite Mirle Automation and Zeng Hsing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirle Automation position performs unexpectedly, Zeng Hsing 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 Zeng Hsing will offset losses from the drop in Zeng Hsing's long position.Mirle Automation vs. United Integrated Services | Mirle Automation vs. Greatek Electronics | Mirle Automation vs. Merry Electronics Co | Mirle Automation vs. Transcend Information |
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Check out your portfolio center.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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