Correlation Between MICRONIC MYDATA and GROUNDS REST

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

By analyzing existing cross correlation between MICRONIC MYDATA and GROUNDS REST NA, you can compare the effects of market volatilities on MICRONIC MYDATA and GROUNDS REST 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 GROUNDS REST. Check out your portfolio center. Please also check ongoing floating volatility patterns of MICRONIC MYDATA and GROUNDS REST.

Diversification Opportunities for MICRONIC MYDATA and GROUNDS REST

0.33

Correlation Coefficient

MICRONIC MYDATA  GROUNDS REST

Weak diversification

The 3 months correlation between MICRONIC and GROUNDS is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding MICRONIC MYDATA and GROUNDS REST NA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GROUNDS REST NA 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 GROUNDS REST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GROUNDS REST NA has no effect on the direction of MICRONIC MYDATA i.e., MICRONIC MYDATA and GROUNDS REST go up and down completely randomly.

Pair Corralation between MICRONIC MYDATA and GROUNDS REST

Assuming the 90 days trading horizon MICRONIC MYDATA is expected to under-perform the GROUNDS REST. But the stock apears to be less risky and, when comparing its historical volatility, MICRONIC MYDATA is 5.71 times less risky than GROUNDS REST. The stock trades about -0.06 of its potential returns per unit of risk. The GROUNDS REST NA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  104.00  in GROUNDS REST NA on October 8, 2024 and sell it today you would lose (4.00) from holding GROUNDS REST NA or give up 3.85% of portfolio value over 90 days.

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

MICRONIC MYDATA  vs.  GROUNDS REST NA

MICRONIC MYDATA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MICRONIC MYDATA are ranked lower than 6 (%) 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.

GROUNDS REST NA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GROUNDS REST NA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, GROUNDS REST reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MICRONIC MYDATA and GROUNDS REST

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

The idea behind MICRONIC MYDATA and GROUNDS REST NA 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.