Correlation Between Stark Technology and Meiloon Industrial

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

By analyzing existing cross correlation between Stark Technology and Meiloon Industrial Co, you can compare the effects of market volatilities on Stark Technology and Meiloon Industrial 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 Stark Technology with a short position of Meiloon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stark Technology and Meiloon Industrial.

Diversification Opportunities for Stark Technology and Meiloon Industrial

-0.71

Correlation Coefficient

Stark Technology  Meiloon Industrial

Pay attention - limited upside

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

Pair Corralation between Stark Technology and Meiloon Industrial

Assuming the 90 days trading horizon Stark Technology is expected to generate 0.79 times more return on investment than Meiloon Industrial. However, Stark Technology is 1.27 times less risky than Meiloon Industrial. It trades about 0.28 of its potential returns per unit of risk. Meiloon Industrial Co is currently generating about -0.26 per unit of risk. If you would invest  13,200  in Stark Technology on October 24, 2024 and sell it today you would earn a total of  1,100  from holding Stark Technology or generate 8.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Stark Technology  vs.  Meiloon Industrial Co

Stark Technology

Risk-Adjusted Performance

6 of 100

Modest

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

Meiloon Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Meiloon Industrial Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Stark Technology and Meiloon Industrial

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

The idea behind Stark Technology and Meiloon Industrial Co 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.