Correlation Between Micro Imaging and Vertical Aerospace

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

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

Diversification Opportunities for Micro Imaging and Vertical Aerospace

0.0

Correlation Coefficient

Micro Imaging  Vertical Aerospace

Pay attention - limited upside

The 3 months correlation between Micro and Vertical is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Micro Imaging Technology and Vertical Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vertical Aerospace and Micro Imaging 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 Micro Imaging Technology are associated (or correlated) with Vertical Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vertical Aerospace has no effect on the direction of Micro Imaging i.e., Micro Imaging and Vertical Aerospace go up and down completely randomly.

Pair Corralation between Micro Imaging and Vertical Aerospace

If you would invest  0.01  in Micro Imaging Technology on December 20, 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	Flat
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Micro Imaging Technology  vs.  Vertical Aerospace

Micro Imaging Technology

Risk-Adjusted Performance

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.

Vertical Aerospace

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vertical Aerospace has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Micro Imaging and Vertical Aerospace

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

The idea behind Micro Imaging Technology and Vertical Aerospace 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.