Correlation Between Micropac Industries and Via Optronics

Can any of the company-specific risk be diversified away by investing in both Micropac Industries and Via Optronics 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 Micropac Industries and Via Optronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Micropac Industries and Via Optronics Ag, you can compare the effects of market volatilities on Micropac Industries and Via Optronics 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 Micropac Industries with a short position of Via Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micropac Industries and Via Optronics.

Diversification Opportunities for Micropac Industries and Via Optronics

0.0

Correlation Coefficient

Micropac Industries  Via Optronics

Pay attention - limited upside

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

Pair Corralation between Micropac Industries and Via Optronics

If you would invest (100.00) in Via Optronics Ag on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Via Optronics Ag or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Micropac Industries  vs.  Via Optronics Ag

Micropac Industries

Risk-Adjusted Performance

Very Weak

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

Via Optronics Ag

Risk-Adjusted Performance

Very Weak

Over the last 90 days Via Optronics Ag has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Via Optronics is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Micropac Industries and Via Optronics

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

The idea behind Micropac Industries and Via Optronics Ag 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.