Correlation Between Cirtek Holdings and Integrated Micro

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

By analyzing existing cross correlation between Cirtek Holdings Philippines and Integrated Micro Electronics, you can compare the effects of market volatilities on Cirtek Holdings and Integrated Micro 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 Cirtek Holdings with a short position of Integrated Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cirtek Holdings and Integrated Micro.

Diversification Opportunities for Cirtek Holdings and Integrated Micro

0.49

Correlation Coefficient

Cirtek Holdings  Integrated Micro

Very weak diversification

The 3 months correlation between Cirtek and Integrated is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cirtek Holdings Philippines and Integrated Micro Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Micro Ele and Cirtek Holdings 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 Cirtek Holdings Philippines are associated (or correlated) with Integrated Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Micro Ele has no effect on the direction of Cirtek Holdings i.e., Cirtek Holdings and Integrated Micro go up and down completely randomly.

Pair Corralation between Cirtek Holdings and Integrated Micro

Assuming the 90 days trading horizon Cirtek Holdings Philippines is expected to generate 3.9 times more return on investment than Integrated Micro. However, Cirtek Holdings is 3.9 times more volatile than Integrated Micro Electronics. It trades about 0.03 of its potential returns per unit of risk. Integrated Micro Electronics is currently generating about -0.04 per unit of risk. If you would invest  61.00  in Cirtek Holdings Philippines on September 26, 2024 and sell it today you would lose (5.00) from holding Cirtek Holdings Philippines or give up 8.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	38.71%
Values	Daily Returns

Cirtek Holdings Philippines  vs.  Integrated Micro Electronics

Cirtek Holdings Phil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cirtek Holdings Philippines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Integrated Micro Ele

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Micro Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Cirtek Holdings and Integrated Micro

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

The idea behind Cirtek Holdings Philippines and Integrated Micro Electronics 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.