Correlation Between Min Aik and Capital Tip
Can any of the company-specific risk be diversified away by investing in both Min Aik and Capital Tip 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 Min Aik and Capital Tip into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Min Aik Technology and Capital Tip Customized, you can compare the effects of market volatilities on Min Aik and Capital Tip 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 Min Aik with a short position of Capital Tip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Min Aik and Capital Tip.
Diversification Opportunities for Min Aik and Capital Tip
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Min and Capital is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and Capital Tip Customized in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Tip Customized and Min Aik 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 Min Aik Technology are associated (or correlated) with Capital Tip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Tip Customized has no effect on the direction of Min Aik i.e., Min Aik and Capital Tip go up and down completely randomly.
Pair Corralation between Min Aik and Capital Tip
Assuming the 90 days trading horizon Min Aik is expected to generate 1.03 times less return on investment than Capital Tip. In addition to that, Min Aik is 2.36 times more volatile than Capital Tip Customized. It trades about 0.04 of its total potential returns per unit of risk. Capital Tip Customized is currently generating about 0.1 per unit of volatility. If you would invest 1,370 in Capital Tip Customized on October 13, 2024 and sell it today you would earn a total of 839.00 from holding Capital Tip Customized or generate 61.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.03% |
| Values | Daily Returns |
Min Aik Technology vs. Capital Tip Customized
Performance |
| Timeline |
| Min Aik Technology |
| Capital Tip Customized |
Min Aik and Capital Tip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Min Aik and Capital Tip
The main advantage of trading using opposite Min Aik and Capital Tip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Min Aik position performs unexpectedly, Capital Tip 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 Capital Tip will offset losses from the drop in Capital Tip's long position.| Min Aik vs. Promise Technology | Min Aik vs. Spirox Corp | Min Aik vs. Zinwell | Min Aik vs. Gigastorage Corp |
| Capital Tip vs. YuantaP shares Taiwan Top | Capital Tip vs. Yuanta Daily Taiwan | Capital Tip vs. Cathay Taiwan 5G | Capital Tip vs. Yuanta Daily CSI |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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