Correlation Between Min Aik and Associated Industries

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

Diversification Opportunities for Min Aik and Associated Industries

0.66

Correlation Coefficient

Min Aik  Associated Industries

Poor diversification

The 3 months correlation between Min and Associated is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and Associated Industries China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Industries 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 Associated Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Industries has no effect on the direction of Min Aik i.e., Min Aik and Associated Industries go up and down completely randomly.

Pair Corralation between Min Aik and Associated Industries

Assuming the 90 days trading horizon Min Aik is expected to generate 3.39 times less return on investment than Associated Industries. In addition to that, Min Aik is 1.51 times more volatile than Associated Industries China. It trades about 0.02 of its total potential returns per unit of risk. Associated Industries China is currently generating about 0.08 per unit of volatility. If you would invest  1,225  in Associated Industries China on December 5, 2024 and sell it today you would earn a total of  70.00  from holding Associated Industries China or generate 5.71% 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.  Associated Industries China

Min Aik Technology

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Min Aik Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Associated Industries

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Industries China are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Associated Industries may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Min Aik and Associated Industries

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

The idea behind Min Aik Technology and Associated Industries China 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.