Correlation Between Min Aik and Vate Technology

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

Diversification Opportunities for Min Aik and Vate Technology

0.65

Correlation Coefficient

Min Aik  Vate Technology

Poor diversification

The 3 months correlation between Min and Vate is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and Vate Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vate 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 Vate Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vate Technology has no effect on the direction of Min Aik i.e., Min Aik and Vate Technology go up and down completely randomly.

Pair Corralation between Min Aik and Vate Technology

Assuming the 90 days trading horizon Min Aik is expected to generate 60.89 times less return on investment than Vate Technology. But when comparing it to its historical volatility, Min Aik Technology is 2.25 times less risky than Vate Technology. It trades about 0.01 of its potential returns per unit of risk. Vate Technology Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,850  in Vate Technology Co on September 13, 2024 and sell it today you would earn a total of  245.00  from holding Vate Technology Co or generate 13.24% return on investment over 90 days.

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

Min Aik Technology  vs.  Vate Technology Co

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 fairly stable basic indicators, Min Aik is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Vate Technology

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vate Technology Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Vate Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Min Aik and Vate Technology

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

The idea behind Min Aik Technology and Vate Technology 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.