Correlation Between NEW MILLENNIUM and TOREX SEMICONDUCTOR

Can any of the company-specific risk be diversified away by investing in both NEW MILLENNIUM and TOREX SEMICONDUCTOR 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 NEW MILLENNIUM and TOREX SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NEW MILLENNIUM IRON and TOREX SEMICONDUCTOR LTD, you can compare the effects of market volatilities on NEW MILLENNIUM and TOREX SEMICONDUCTOR 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 NEW MILLENNIUM with a short position of TOREX SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW MILLENNIUM and TOREX SEMICONDUCTOR.

Diversification Opportunities for NEW MILLENNIUM and TOREX SEMICONDUCTOR

-0.66

Correlation Coefficient

NEW MILLENNIUM  TOREX SEMICONDUCTOR

Excellent diversification

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

Pair Corralation between NEW MILLENNIUM and TOREX SEMICONDUCTOR

Assuming the 90 days trading horizon NEW MILLENNIUM IRON is expected to under-perform the TOREX SEMICONDUCTOR. But the stock apears to be less risky and, when comparing its historical volatility, NEW MILLENNIUM IRON is 1.24 times less risky than TOREX SEMICONDUCTOR. The stock trades about -0.1 of its potential returns per unit of risk. The TOREX SEMICONDUCTOR LTD is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  675.00  in TOREX SEMICONDUCTOR LTD on December 20, 2024 and sell it today you would earn a total of  95.00  from holding TOREX SEMICONDUCTOR LTD or generate 14.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

NEW MILLENNIUM IRON  vs.  TOREX SEMICONDUCTOR LTD

NEW MILLENNIUM IRON

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEW MILLENNIUM IRON has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

TOREX SEMICONDUCTOR LTD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TOREX SEMICONDUCTOR LTD are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TOREX SEMICONDUCTOR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NEW MILLENNIUM and TOREX SEMICONDUCTOR

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

The idea behind NEW MILLENNIUM IRON and TOREX SEMICONDUCTOR LTD 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.