Correlation Between Minetech Resources and Digistar Bhd

Can any of the company-specific risk be diversified away by investing in both Minetech Resources and Digistar Bhd 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 Minetech Resources and Digistar Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Minetech Resources and Digistar Bhd

0.43

Correlation Coefficient

Minetech Resources  Digistar Bhd

Very weak diversification

The 3 months correlation between Minetech and Digistar is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Minetech Resources Bhd and Digistar Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digistar Bhd and Minetech Resources 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 Minetech Resources Bhd are associated (or correlated) with Digistar Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digistar Bhd has no effect on the direction of Minetech Resources i.e., Minetech Resources and Digistar Bhd go up and down completely randomly.

Pair Corralation between Minetech Resources and Digistar Bhd

Assuming the 90 days trading horizon Minetech Resources Bhd is expected to under-perform the Digistar Bhd. But the stock apears to be less risky and, when comparing its historical volatility, Minetech Resources Bhd is 1.2 times less risky than Digistar Bhd. The stock trades about -0.13 of its potential returns per unit of risk. The Digistar Bhd is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  6.00  in Digistar Bhd on November 29, 2024 and sell it today you would lose (1.00) from holding Digistar Bhd or give up 16.67% of portfolio value over 90 days.

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

Minetech Resources Bhd  vs.  Digistar Bhd

Minetech Resources Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Minetech Resources Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Digistar Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Digistar Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Minetech Resources and Digistar Bhd

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

The idea behind Minetech Resources Bhd and Digistar Bhd 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.