Correlation Between Minetech Resources and AMMB Holdings

Can any of the company-specific risk be diversified away by investing in both Minetech Resources and AMMB Holdings 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 AMMB Holdings 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 AMMB Holdings Bhd, you can compare the effects of market volatilities on Minetech Resources and AMMB Holdings 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 AMMB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minetech Resources and AMMB Holdings.

Diversification Opportunities for Minetech Resources and AMMB Holdings

-0.69

Correlation Coefficient

Minetech Resources  AMMB Holdings

Excellent diversification

The 3 months correlation between Minetech and AMMB is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Minetech Resources Bhd and AMMB Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMMB Holdings 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 AMMB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMMB Holdings Bhd has no effect on the direction of Minetech Resources i.e., Minetech Resources and AMMB Holdings go up and down completely randomly.

Pair Corralation between Minetech Resources and AMMB Holdings

Assuming the 90 days trading horizon Minetech Resources Bhd is expected to under-perform the AMMB Holdings. In addition to that, Minetech Resources is 4.43 times more volatile than AMMB Holdings Bhd. It trades about -0.13 of its total potential returns per unit of risk. AMMB Holdings Bhd is currently generating about 0.13 per unit of volatility. If you would invest  529.00  in AMMB Holdings Bhd on November 29, 2024 and sell it today you would earn a total of  42.00  from holding AMMB Holdings Bhd or generate 7.94% return on investment over 90 days.

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

Minetech Resources Bhd  vs.  AMMB Holdings 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.

AMMB Holdings Bhd

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AMMB Holdings Bhd are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, AMMB Holdings may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Minetech Resources and AMMB Holdings

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

The idea behind Minetech Resources Bhd and AMMB Holdings 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.