Correlation Between MW Investment and Micro Imaging

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

By analyzing existing cross correlation between MW Investment Holding and Micro Imaging Technology, you can compare the effects of market volatilities on MW Investment and Micro Imaging 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 MW Investment with a short position of Micro Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of MW Investment and Micro Imaging.

Diversification Opportunities for MW Investment and Micro Imaging

1.0

Correlation Coefficient

MW Investment  Micro Imaging

No risk reduction

The 3 months correlation between MEGH and Micro is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding MW Investment Holding and Micro Imaging Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Imaging Technology and MW Investment 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 MW Investment Holding are associated (or correlated) with Micro Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Imaging Technology has no effect on the direction of MW Investment i.e., MW Investment and Micro Imaging go up and down completely randomly.

Pair Corralation between MW Investment and Micro Imaging

If you would invest  0.01  in Micro Imaging Technology on October 24, 2024 and sell it today you would earn a total of  0.00  from holding Micro Imaging Technology or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	90.48%
Values	Daily Returns

MW Investment Holding  vs.  Micro Imaging Technology

MW Investment Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MW Investment Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, MW Investment is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Micro Imaging Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micro Imaging Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Micro Imaging is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MW Investment and Micro Imaging

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

The idea behind MW Investment Holding and Micro Imaging Technology 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..