Correlation Between MMTEC and Aware

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Can any of the company-specific risk be diversified away by investing in both MMTEC and Aware 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 MMTEC and Aware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MMTEC Inc and Aware Inc, you can compare the effects of market volatilities on MMTEC and Aware 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 MMTEC with a short position of Aware. Check out your portfolio center. Please also check ongoing floating volatility patterns of MMTEC and Aware.

Diversification Opportunities for MMTEC and Aware

0.62
  Correlation Coefficient

Poor diversification

The 3 months correlation between MMTEC and Aware is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding MMTEC Inc and Aware Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aware Inc and MMTEC 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 MMTEC Inc are associated (or correlated) with Aware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aware Inc has no effect on the direction of MMTEC i.e., MMTEC and Aware go up and down completely randomly.

Pair Corralation between MMTEC and Aware

Considering the 90-day investment horizon MMTEC Inc is expected to generate 3.29 times more return on investment than Aware. However, MMTEC is 3.29 times more volatile than Aware Inc. It trades about 0.05 of its potential returns per unit of risk. Aware Inc is currently generating about 0.02 per unit of risk. If you would invest  762.00  in MMTEC Inc on October 11, 2024 and sell it today you would lose (609.00) from holding MMTEC Inc or give up 79.92% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

MMTEC Inc  vs.  Aware Inc

 Performance 
       Timeline  
MMTEC Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days MMTEC Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Aware Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aware Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

MMTEC and Aware Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MMTEC and Aware

The main advantage of trading using opposite MMTEC and Aware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MMTEC position performs unexpectedly, Aware 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 Aware will offset losses from the drop in Aware's long position.
The idea behind MMTEC Inc and Aware Inc 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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