Correlation Between Auras Technology and Micro Star

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

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

Diversification Opportunities for Auras Technology and Micro Star

-0.03

Correlation Coefficient

Auras Technology  Micro Star

Good diversification

The 3 months correlation between Auras and Micro is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Auras Technology Co and Micro Star International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Star Internati and Auras 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 Auras Technology Co are associated (or correlated) with Micro Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Star Internati has no effect on the direction of Auras Technology i.e., Auras Technology and Micro Star go up and down completely randomly.

Pair Corralation between Auras Technology and Micro Star

Assuming the 90 days trading horizon Auras Technology Co is expected to under-perform the Micro Star. In addition to that, Auras Technology is 2.0 times more volatile than Micro Star International Co. It trades about -0.02 of its total potential returns per unit of risk. Micro Star International Co is currently generating about -0.03 per unit of volatility. If you would invest  17,100  in Micro Star International Co on September 15, 2024 and sell it today you would lose (150.00) from holding Micro Star International Co or give up 0.88% of portfolio value over 90 days.

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

Auras Technology Co  vs.  Micro Star International Co

Auras Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Auras Technology Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Auras Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Micro Star Internati

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Auras Technology and Micro Star

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

The idea behind Auras Technology Co and Micro Star International 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.