Correlation Between Min Aik and Advantech
Can any of the company-specific risk be diversified away by investing in both Min Aik and Advantech 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 Advantech 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 Advantech Co, you can compare the effects of market volatilities on Min Aik and Advantech 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 Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Min Aik and Advantech.
Diversification Opportunities for Min Aik and Advantech
Very good diversification
The 3 months correlation between Min and Advantech is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech 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 Advantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantech has no effect on the direction of Min Aik i.e., Min Aik and Advantech go up and down completely randomly.
Pair Corralation between Min Aik and Advantech
Assuming the 90 days trading horizon Min Aik Technology is expected to under-perform the Advantech. In addition to that, Min Aik is 1.81 times more volatile than Advantech Co. It trades about -0.25 of its total potential returns per unit of risk. Advantech Co is currently generating about 0.15 per unit of volatility. If you would invest 32,200 in Advantech Co on September 3, 2024 and sell it today you would earn a total of 1,350 from holding Advantech Co or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Min Aik Technology vs. Advantech Co
Performance |
| Timeline |
| Min Aik Technology |
| Advantech |
Min Aik and Advantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Min Aik and Advantech
The main advantage of trading using opposite Min Aik and Advantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Min Aik position performs unexpectedly, Advantech 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 Advantech will offset losses from the drop in Advantech's long position.| Min Aik vs. Taiwan Semiconductor Manufacturing | Min Aik vs. Yang Ming Marine | Min Aik vs. ASE Industrial Holding | Min Aik vs. AU Optronics |
| Advantech vs. Taiwan Semiconductor Manufacturing | Advantech vs. Yang Ming Marine | Advantech vs. ASE Industrial Holding | Advantech vs. AU Optronics |
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.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Global Correlations Find global opportunities by holding instruments from different markets |