Correlation Between Sun Max and Min Aik

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

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

Diversification Opportunities for Sun Max and Min Aik

-0.39

Correlation Coefficient

Sun Max  Min Aik

Very good diversification

The 3 months correlation between Sun and Min is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sun Max Tech 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 Sun Max 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 Sun Max Tech 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 Sun Max i.e., Sun Max and Min Aik go up and down completely randomly.

Pair Corralation between Sun Max and Min Aik

Assuming the 90 days trading horizon Sun Max Tech is expected to under-perform the Min Aik. In addition to that, Sun Max is 1.46 times more volatile than Min Aik Technology. It trades about -0.01 of its total potential returns per unit of risk. Min Aik Technology is currently generating about 0.0 per unit of volatility. 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

Sun Max Tech  vs.  Min Aik Technology

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.

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.

Pair Trading with Sun Max and Min Aik

The main advantage of trading using opposite Sun Max and Min Aik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Max 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 Sun Max Tech 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.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.