Correlation Between Promise Technology and Min Aik

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

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

Diversification Opportunities for Promise Technology and Min Aik

0.75

Correlation Coefficient

Promise Technology  Min Aik

Poor diversification

The 3 months correlation between Promise and Min is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Promise Technology and Min Aik Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Min Aik Technology and Promise 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 Promise Technology are associated (or correlated) with Min Aik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Min Aik Technology has no effect on the direction of Promise Technology i.e., Promise Technology and Min Aik go up and down completely randomly.

Pair Corralation between Promise Technology and Min Aik

Assuming the 90 days trading horizon Promise Technology is expected to generate 0.51 times more return on investment than Min Aik. However, Promise Technology is 1.95 times less risky than Min Aik. It trades about -0.05 of its potential returns per unit of risk. Min Aik Technology is currently generating about -0.07 per unit of risk. If you would invest  1,230  in Promise Technology on September 15, 2024 and sell it today you would lose (50.00) from holding Promise Technology or give up 4.07% of portfolio value over 90 days.

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

Promise Technology  vs.  Min Aik Technology

Promise Technology

Risk-Adjusted Performance

0 of 100

Very Weak

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

Min Aik Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Min Aik Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Promise Technology and Min Aik

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

The idea behind Promise Technology and Min Aik Technology 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.