Correlation Between Min Aik and Gold Rain

Can any of the company-specific risk be diversified away by investing in both Min Aik and Gold Rain 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 Gold Rain 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 Gold Rain Enterprises, you can compare the effects of market volatilities on Min Aik and Gold Rain 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 Gold Rain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Min Aik and Gold Rain.

Diversification Opportunities for Min Aik and Gold Rain

-0.06

Correlation Coefficient

Min Aik  Gold Rain

Good diversification

The 3 months correlation between Min and Gold is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and Gold Rain Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Rain Enterprises 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 Gold Rain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Rain Enterprises has no effect on the direction of Min Aik i.e., Min Aik and Gold Rain go up and down completely randomly.

Pair Corralation between Min Aik and Gold Rain

Assuming the 90 days trading horizon Min Aik is expected to generate 2.61 times less return on investment than Gold Rain. In addition to that, Min Aik is 1.33 times more volatile than Gold Rain Enterprises. It trades about 0.01 of its total potential returns per unit of risk. Gold Rain Enterprises is currently generating about 0.02 per unit of volatility. If you would invest  5,070  in Gold Rain Enterprises on October 6, 2024 and sell it today you would earn a total of  20.00  from holding Gold Rain Enterprises or generate 0.39% return on investment over 90 days.

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

Min Aik Technology  vs.  Gold Rain Enterprises

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.

Gold Rain Enterprises

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Rain Enterprises are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Gold Rain 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 Min Aik and Gold Rain

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

The idea behind Min Aik Technology and Gold Rain Enterprises 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.