Correlation Between Integrated Micro and Cirtek Holdings

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

By analyzing existing cross correlation between Integrated Micro Electronics and Cirtek Holdings Philippines, you can compare the effects of market volatilities on Integrated Micro and Cirtek 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 Integrated Micro with a short position of Cirtek Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Micro and Cirtek Holdings.

Diversification Opportunities for Integrated Micro and Cirtek Holdings

0.16

Correlation Coefficient

Integrated Micro  Cirtek Holdings

Average diversification

The 3 months correlation between Integrated and Cirtek is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Micro Electronics and Cirtek Holdings Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirtek Holdings Phil and Integrated Micro 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 Integrated Micro Electronics are associated (or correlated) with Cirtek Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirtek Holdings Phil has no effect on the direction of Integrated Micro i.e., Integrated Micro and Cirtek Holdings go up and down completely randomly.

Pair Corralation between Integrated Micro and Cirtek Holdings

Assuming the 90 days trading horizon Integrated Micro Electronics is expected to under-perform the Cirtek Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Integrated Micro Electronics is 1.37 times less risky than Cirtek Holdings. The stock trades about -0.15 of its potential returns per unit of risk. The Cirtek Holdings Philippines is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  4,900  in Cirtek Holdings Philippines on September 29, 2024 and sell it today you would lose (290.00) from holding Cirtek Holdings Philippines or give up 5.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	75.0%
Values	Daily Returns

Integrated Micro Electronics  vs.  Cirtek Holdings Philippines

Integrated Micro Ele

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cirtek Holdings Phil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cirtek Holdings Philippines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Cirtek Holdings is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Integrated Micro and Cirtek Holdings

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

The idea behind Integrated Micro Electronics and Cirtek Holdings Philippines 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.