Correlation Between Mingteng International and Sypris Solutions

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

By analyzing existing cross correlation between Mingteng International and Sypris Solutions, you can compare the effects of market volatilities on Mingteng International and Sypris Solutions 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 Mingteng International with a short position of Sypris Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mingteng International and Sypris Solutions.

Diversification Opportunities for Mingteng International and Sypris Solutions

-0.71

Correlation Coefficient

Mingteng International  Sypris Solutions

Pay attention - limited upside

The 3 months correlation between Mingteng and Sypris is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Mingteng International and Sypris Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sypris Solutions and Mingteng International 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 Mingteng International are associated (or correlated) with Sypris Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sypris Solutions has no effect on the direction of Mingteng International i.e., Mingteng International and Sypris Solutions go up and down completely randomly.

Pair Corralation between Mingteng International and Sypris Solutions

Given the investment horizon of 90 days Mingteng International is expected to generate 4.27 times more return on investment than Sypris Solutions. However, Mingteng International is 4.27 times more volatile than Sypris Solutions. It trades about 0.08 of its potential returns per unit of risk. Sypris Solutions is currently generating about 0.03 per unit of risk. If you would invest  435.00  in Mingteng International on August 31, 2024 and sell it today you would earn a total of  119.00  from holding Mingteng International or generate 27.36% return on investment over 90 days.

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

Mingteng International  vs.  Sypris Solutions

Mingteng International

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mingteng International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Mingteng International displayed solid returns over the last few months and may actually be approaching a breakup point.

Sypris Solutions

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sypris Solutions are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Sypris Solutions is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Mingteng International and Sypris Solutions

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

The idea behind Mingteng International and Sypris Solutions 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.