Correlation Between MICRONIC MYDATA and CGN Power

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

By analyzing existing cross correlation between MICRONIC MYDATA and CGN Power Co, you can compare the effects of market volatilities on MICRONIC MYDATA and CGN Power 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 MICRONIC MYDATA with a short position of CGN Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of MICRONIC MYDATA and CGN Power.

Diversification Opportunities for MICRONIC MYDATA and CGN Power

-0.45

Correlation Coefficient

MICRONIC MYDATA  CGN Power

Very good diversification

The 3 months correlation between MICRONIC and CGN is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding MICRONIC MYDATA and CGN Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGN Power and MICRONIC MYDATA 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 MICRONIC MYDATA are associated (or correlated) with CGN Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGN Power has no effect on the direction of MICRONIC MYDATA i.e., MICRONIC MYDATA and CGN Power go up and down completely randomly.

Pair Corralation between MICRONIC MYDATA and CGN Power

Assuming the 90 days trading horizon MICRONIC MYDATA is expected to generate 0.85 times more return on investment than CGN Power. However, MICRONIC MYDATA is 1.18 times less risky than CGN Power. It trades about 0.08 of its potential returns per unit of risk. CGN Power Co is currently generating about -0.08 per unit of risk. If you would invest  3,602  in MICRONIC MYDATA on October 9, 2024 and sell it today you would earn a total of  76.00  from holding MICRONIC MYDATA or generate 2.11% return on investment over 90 days.

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

MICRONIC MYDATA  vs.  CGN Power Co

MICRONIC MYDATA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MICRONIC MYDATA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, MICRONIC MYDATA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CGN Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CGN Power Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with MICRONIC MYDATA and CGN Power

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

The idea behind MICRONIC MYDATA and CGN Power Co 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.