Correlation Between Min Aik and Sun Max

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

Diversification Opportunities for Min Aik and Sun Max

-0.39

Correlation Coefficient

Min Aik  Sun Max

Very good diversification

The 3 months correlation between Min and Sun is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and Sun Max Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Max Tech 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 Sun Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Max Tech has no effect on the direction of Min Aik i.e., Min Aik and Sun Max go up and down completely randomly.

Pair Corralation between Min Aik and Sun Max

Assuming the 90 days trading horizon Min Aik Technology is expected to generate 0.68 times more return on investment than Sun Max. However, Min Aik Technology is 1.46 times less risky than Sun Max. It trades about 0.0 of its potential returns per unit of risk. Sun Max Tech is currently generating about -0.01 per unit of risk. If you would invest  2,400  in Min Aik Technology on September 24, 2024 and sell it today you would lose (10.00) from holding Min Aik Technology or give up 0.42% of portfolio value over 90 days.

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

Min Aik Technology  vs.  Sun Max Tech

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.

Sun Max Tech

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Max Tech are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sun Max may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Min Aik and Sun Max

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

The idea behind Min Aik Technology and Sun Max Tech 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..