Correlation Between Microtips Technology and Min Aik

Can any of the company-specific risk be diversified away by investing in both Microtips Technology and Min Aik 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 Microtips Technology and Min Aik into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Microtips Technology and Min Aik Technology, you can compare the effects of market volatilities on Microtips Technology and Min Aik 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 Microtips Technology with a short position of Min Aik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microtips Technology and Min Aik.

Diversification Opportunities for Microtips Technology and Min Aik

-0.16

Correlation Coefficient

Microtips Technology  Min Aik

Good diversification

The 3 months correlation between Microtips and Min is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Microtips Technology and Min Aik Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Min Aik Technology and Microtips Technology 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 Microtips Technology are associated (or correlated) with Min Aik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Min Aik Technology has no effect on the direction of Microtips Technology i.e., Microtips Technology and Min Aik go up and down completely randomly.

Pair Corralation between Microtips Technology and Min Aik

Assuming the 90 days trading horizon Microtips Technology is expected to under-perform the Min Aik. But the stock apears to be less risky and, when comparing its historical volatility, Microtips Technology is 2.0 times less risky than Min Aik. The stock trades about -0.06 of its potential returns per unit of risk. The Min Aik Technology is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,420  in Min Aik Technology on December 28, 2024 and sell it today you would earn a total of  475.00  from holding Min Aik Technology or generate 19.63% return on investment over 90 days.

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

Microtips Technology  vs.  Min Aik Technology

Microtips Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Microtips Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Microtips Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Min Aik Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Min Aik Technology are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Min Aik showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microtips Technology and Min Aik

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

The idea behind Microtips Technology and Min Aik 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..