Correlation Between MMTEC and Australian Oilseeds

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

By analyzing existing cross correlation between MMTEC Inc and Australian Oilseeds Holdings, you can compare the effects of market volatilities on MMTEC and Australian Oilseeds 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 Australian Oilseeds. Check out your portfolio center. Please also check ongoing floating volatility patterns of MMTEC and Australian Oilseeds.

Diversification Opportunities for MMTEC and Australian Oilseeds

-0.33

Correlation Coefficient

MMTEC  Australian Oilseeds

Very good diversification

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

Pair Corralation between MMTEC and Australian Oilseeds

Considering the 90-day investment horizon MMTEC Inc is expected to under-perform the Australian Oilseeds. But the stock apears to be less risky and, when comparing its historical volatility, MMTEC Inc is 1.04 times less risky than Australian Oilseeds. The stock trades about -0.14 of its potential returns per unit of risk. The Australian Oilseeds Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  120.00  in Australian Oilseeds Holdings on December 29, 2024 and sell it today you would earn a total of  12.00  from holding Australian Oilseeds Holdings or generate 10.0% return on investment over 90 days.

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

MMTEC Inc  vs.  Australian Oilseeds Holdings

MMTEC Inc

Risk-Adjusted Performance

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 April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Australian Oilseeds

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Australian Oilseeds Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Australian Oilseeds unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MMTEC and Australian Oilseeds

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

The idea behind MMTEC Inc and Australian Oilseeds Holdings 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.