Correlation Between Min Aik and Uniform Industrial
Can any of the company-specific risk be diversified away by investing in both Min Aik and Uniform Industrial 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 Uniform Industrial 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 Uniform Industrial Corp, you can compare the effects of market volatilities on Min Aik and Uniform Industrial 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 Uniform Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Min Aik and Uniform Industrial.
Diversification Opportunities for Min Aik and Uniform Industrial
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Min and Uniform is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and Uniform Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniform Industrial Corp 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 Uniform Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniform Industrial Corp has no effect on the direction of Min Aik i.e., Min Aik and Uniform Industrial go up and down completely randomly.
Pair Corralation between Min Aik and Uniform Industrial
Assuming the 90 days trading horizon Min Aik Technology is expected to generate 1.19 times more return on investment than Uniform Industrial. However, Min Aik is 1.19 times more volatile than Uniform Industrial Corp. It trades about -0.11 of its potential returns per unit of risk. Uniform Industrial Corp is currently generating about -0.25 per unit of risk. If you would invest 2,730 in Min Aik Technology on November 6, 2024 and sell it today you would lose (415.00) from holding Min Aik Technology or give up 15.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Min Aik Technology vs. Uniform Industrial Corp
Performance |
| Timeline |
| Min Aik Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Uniform Industrial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Min Aik and Uniform Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Min Aik and Uniform Industrial
The main advantage of trading using opposite Min Aik and Uniform Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Min Aik position performs unexpectedly, Uniform Industrial 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 Uniform Industrial will offset losses from the drop in Uniform Industrial's long position.The idea behind Min Aik Technology and Uniform Industrial Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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