Correlation Between Min Aik and United Radiant

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

Diversification Opportunities for Min Aik and United Radiant

-0.59

Correlation Coefficient

Min Aik  United Radiant

Excellent diversification

The 3 months correlation between Min and United is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and United Radiant Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Radiant Technology 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 United Radiant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Radiant Technology has no effect on the direction of Min Aik i.e., Min Aik and United Radiant go up and down completely randomly.

Pair Corralation between Min Aik and United Radiant

Assuming the 90 days trading horizon Min Aik Technology is expected to generate 1.65 times more return on investment than United Radiant. However, Min Aik is 1.65 times more volatile than United Radiant Technology. It trades about 0.05 of its potential returns per unit of risk. United Radiant Technology is currently generating about 0.03 per unit of risk. If you would invest  1,592  in Min Aik Technology on September 23, 2024 and sell it today you would earn a total of  798.00  from holding Min Aik Technology or generate 50.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

Min Aik Technology  vs.  United Radiant Technology

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.

United Radiant Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in United Radiant Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, United Radiant may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Min Aik and United Radiant

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

The idea behind Min Aik Technology and United Radiant 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.