Correlation Between Min Aik and Wholetech System

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

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

Diversification Opportunities for Min Aik and Wholetech System

-0.54

Correlation Coefficient

Min Aik  Wholetech System

Excellent diversification

The 3 months correlation between Min and Wholetech is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and Wholetech System Hitech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wholetech System Hitech and Min Aik 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 Min Aik Technology are associated (or correlated) with Wholetech System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wholetech System Hitech has no effect on the direction of Min Aik i.e., Min Aik and Wholetech System go up and down completely randomly.

Pair Corralation between Min Aik and Wholetech System

Assuming the 90 days trading horizon Min Aik Technology is expected to generate 1.28 times more return on investment than Wholetech System. However, Min Aik is 1.28 times more volatile than Wholetech System Hitech. It trades about 0.14 of its potential returns per unit of risk. Wholetech System Hitech is currently generating about -0.01 per unit of risk. If you would invest  2,365  in Min Aik Technology on December 24, 2024 and sell it today you would earn a total of  440.00  from holding Min Aik Technology or generate 18.6% return on investment over 90 days.

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

Min Aik Technology  vs.  Wholetech System Hitech

Min Aik Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Min Aik Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Min Aik showed solid returns over the last few months and may actually be approaching a breakup point.

Wholetech System Hitech

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Min Aik and Wholetech System

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

The idea behind Min Aik Technology and Wholetech System Hitech 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.