Correlation Between SS TECH and MITECH CoLtd
Can any of the company-specific risk be diversified away by investing in both SS TECH and MITECH CoLtd 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 SS TECH and MITECH CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and MITECH CoLtd, you can compare the effects of market volatilities on SS TECH and MITECH CoLtd 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 SS TECH with a short position of MITECH CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and MITECH CoLtd.
Diversification Opportunities for SS TECH and MITECH CoLtd
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between 101490 and MITECH is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and MITECH CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MITECH CoLtd and SS TECH 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 SS TECH are associated (or correlated) with MITECH CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MITECH CoLtd has no effect on the direction of SS TECH i.e., SS TECH and MITECH CoLtd go up and down completely randomly.
Pair Corralation between SS TECH and MITECH CoLtd
Assuming the 90 days trading horizon SS TECH is expected to generate 1.76 times more return on investment than MITECH CoLtd. However, SS TECH is 1.76 times more volatile than MITECH CoLtd. It trades about 0.37 of its potential returns per unit of risk. MITECH CoLtd is currently generating about -0.17 per unit of risk. If you would invest 2,560,000 in SS TECH on October 29, 2024 and sell it today you would earn a total of 530,000 from holding SS TECH or generate 20.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. MITECH CoLtd
Performance |
| Timeline |
| SS TECH |
| MITECH CoLtd |
SS TECH and MITECH CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and MITECH CoLtd
The main advantage of trading using opposite SS TECH and MITECH CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH position performs unexpectedly, MITECH CoLtd 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 MITECH CoLtd will offset losses from the drop in MITECH CoLtd's long position.The idea behind SS TECH and MITECH CoLtd 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.| MITECH CoLtd vs. V One Tech Co | MITECH CoLtd vs. SEOWONINTECHCoLtd | MITECH CoLtd vs. SS TECH | MITECH CoLtd vs. Woori Technology Investment |
Check out your portfolio center.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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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