Correlation Between Microelectronics and Aker Technology
Can any of the company-specific risk be diversified away by investing in both Microelectronics and Aker Technology 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 Microelectronics and Aker Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microelectronics Technology and Aker Technology Co, you can compare the effects of market volatilities on Microelectronics and Aker Technology 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 Microelectronics with a short position of Aker Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microelectronics and Aker Technology.
Diversification Opportunities for Microelectronics and Aker Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microelectronics and Aker is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microelectronics Technology and Aker Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Technology and Microelectronics 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 Microelectronics Technology are associated (or correlated) with Aker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Technology has no effect on the direction of Microelectronics i.e., Microelectronics and Aker Technology go up and down completely randomly.
Pair Corralation between Microelectronics and Aker Technology
Assuming the 90 days trading horizon Microelectronics Technology is expected to generate 1.68 times more return on investment than Aker Technology. However, Microelectronics is 1.68 times more volatile than Aker Technology Co. It trades about -0.03 of its potential returns per unit of risk. Aker Technology Co is currently generating about -0.28 per unit of risk. If you would invest 3,540 in Microelectronics Technology on October 24, 2024 and sell it today you would lose (115.00) from holding Microelectronics Technology or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Microelectronics Technology vs. Aker Technology Co
Performance |
| Timeline |
| Microelectronics Tec |
| Aker Technology |
Microelectronics and Aker Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microelectronics and Aker Technology
The main advantage of trading using opposite Microelectronics and Aker Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microelectronics position performs unexpectedly, Aker Technology 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 Aker Technology will offset losses from the drop in Aker Technology's long position.| Microelectronics vs. D Link Corp | Microelectronics vs. Accton Technology Corp | Microelectronics vs. Macronix International Co | Microelectronics vs. Ritek Corp |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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