Correlation Between Minetech Resources and EA Technique

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

Diversification Opportunities for Minetech Resources and EA Technique

-0.37

Correlation Coefficient

Minetech Resources  EA Technique

Very good diversification

The 3 months correlation between Minetech and 5259 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Minetech Resources Bhd and EA Technique M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Technique M 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 EA Technique. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Technique M has no effect on the direction of Minetech Resources i.e., Minetech Resources and EA Technique go up and down completely randomly.

Pair Corralation between Minetech Resources and EA Technique

Assuming the 90 days trading horizon Minetech Resources Bhd is expected to under-perform the EA Technique. In addition to that, Minetech Resources is 1.51 times more volatile than EA Technique M. It trades about -0.13 of its total potential returns per unit of risk. EA Technique M is currently generating about 0.02 per unit of volatility. If you would invest  30.00  in EA Technique M on November 29, 2024 and sell it today you would earn a total of  0.00  from holding EA Technique M or generate 0.0% return on investment over 90 days.

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

Minetech Resources Bhd  vs.  EA Technique M

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.

EA Technique M

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EA Technique M are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, EA Technique is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Minetech Resources and EA Technique

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

The idea behind Minetech Resources Bhd and EA Technique M 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.