Correlation Between Mitake Information and Sung Gang

Can any of the company-specific risk be diversified away by investing in both Mitake Information and Sung Gang 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 Mitake Information and Sung Gang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mitake Information and Sung Gang Asset, you can compare the effects of market volatilities on Mitake Information and Sung Gang 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 Mitake Information with a short position of Sung Gang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitake Information and Sung Gang.

Diversification Opportunities for Mitake Information and Sung Gang

-0.56

Correlation Coefficient

Mitake Information  Sung Gang

Excellent diversification

The 3 months correlation between Mitake and Sung is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mitake Information and Sung Gang Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sung Gang Asset and Mitake Information 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 Mitake Information are associated (or correlated) with Sung Gang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sung Gang Asset has no effect on the direction of Mitake Information i.e., Mitake Information and Sung Gang go up and down completely randomly.

Pair Corralation between Mitake Information and Sung Gang

Assuming the 90 days trading horizon Mitake Information is expected to generate 0.23 times more return on investment than Sung Gang. However, Mitake Information is 4.32 times less risky than Sung Gang. It trades about 0.04 of its potential returns per unit of risk. Sung Gang Asset is currently generating about -0.03 per unit of risk. If you would invest  6,330  in Mitake Information on October 22, 2024 and sell it today you would earn a total of  120.00  from holding Mitake Information or generate 1.9% return on investment over 90 days.

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

Mitake Information  vs.  Sung Gang Asset

Mitake Information

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mitake Information are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Mitake Information is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Sung Gang Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sung Gang Asset has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sung Gang is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Mitake Information and Sung Gang

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

The idea behind Mitake Information and Sung Gang Asset 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.