Correlation Between Freight Technologies and MMTEC

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

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

Diversification Opportunities for Freight Technologies and MMTEC

0.08

Correlation Coefficient

Freight Technologies  MMTEC

Significant diversification

The 3 months correlation between Freight and MMTEC is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Freight Technologies and MMTEC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MMTEC Inc and Freight Technologies 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 Freight Technologies are associated (or correlated) with MMTEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MMTEC Inc has no effect on the direction of Freight Technologies i.e., Freight Technologies and MMTEC go up and down completely randomly.

Pair Corralation between Freight Technologies and MMTEC

Given the investment horizon of 90 days Freight Technologies is expected to under-perform the MMTEC. But the stock apears to be less risky and, when comparing its historical volatility, Freight Technologies is 2.37 times less risky than MMTEC. The stock trades about -0.21 of its potential returns per unit of risk. The MMTEC Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,960  in MMTEC Inc on October 15, 2024 and sell it today you would lose (1,818) from holding MMTEC Inc or give up 92.76% of portfolio value over 90 days.

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

Freight Technologies  vs.  MMTEC Inc

Freight Technologies

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Freight Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Freight Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MMTEC Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MMTEC Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Freight Technologies and MMTEC

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

The idea behind Freight Technologies and MMTEC Inc 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.