Correlation Between Infortrend Technology and Min Aik
Can any of the company-specific risk be diversified away by investing in both Infortrend Technology and Min Aik 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 Infortrend Technology and Min Aik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infortrend Technology and Min Aik Technology, you can compare the effects of market volatilities on Infortrend Technology and Min Aik 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 Infortrend Technology with a short position of Min Aik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infortrend Technology and Min Aik.
Diversification Opportunities for Infortrend Technology and Min Aik
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Infortrend and Min is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Infortrend Technology and Min Aik Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Min Aik Technology and Infortrend Technology 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 Infortrend Technology are associated (or correlated) with Min Aik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Min Aik Technology has no effect on the direction of Infortrend Technology i.e., Infortrend Technology and Min Aik go up and down completely randomly.
Pair Corralation between Infortrend Technology and Min Aik
Assuming the 90 days trading horizon Infortrend Technology is expected to generate 1.35 times more return on investment than Min Aik. However, Infortrend Technology is 1.35 times more volatile than Min Aik Technology. It trades about 0.03 of its potential returns per unit of risk. Min Aik Technology is currently generating about -0.29 per unit of risk. If you would invest 3,630 in Infortrend Technology on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Infortrend Technology or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infortrend Technology vs. Min Aik Technology
Performance |
| Timeline |
| Infortrend Technology |
| Min Aik Technology |
Infortrend Technology and Min Aik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infortrend Technology and Min Aik
The main advantage of trading using opposite Infortrend Technology and Min Aik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infortrend Technology position performs unexpectedly, Min Aik 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 Min Aik will offset losses from the drop in Min Aik's long position.The idea behind Infortrend Technology and Min Aik Technology 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.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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