Correlation Between Min Aik and Zinwell
Can any of the company-specific risk be diversified away by investing in both Min Aik and Zinwell 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 Zinwell 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 Zinwell, you can compare the effects of market volatilities on Min Aik and Zinwell 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 Zinwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Min Aik and Zinwell.
Diversification Opportunities for Min Aik and Zinwell
Poor diversification
The 3 months correlation between Min and Zinwell is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and Zinwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinwell 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 Zinwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinwell has no effect on the direction of Min Aik i.e., Min Aik and Zinwell go up and down completely randomly.
Pair Corralation between Min Aik and Zinwell
Assuming the 90 days trading horizon Min Aik Technology is expected to generate 1.28 times more return on investment than Zinwell. However, Min Aik is 1.28 times more volatile than Zinwell. It trades about 0.04 of its potential returns per unit of risk. Zinwell is currently generating about -0.01 per unit of risk. If you would invest 1,715 in Min Aik Technology on September 2, 2024 and sell it today you would earn a total of 635.00 from holding Min Aik Technology or generate 37.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Min Aik Technology vs. Zinwell
Performance |
| Timeline |
| Min Aik Technology |
| Zinwell |
Min Aik and Zinwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Min Aik and Zinwell
The main advantage of trading using opposite Min Aik and Zinwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Min Aik position performs unexpectedly, Zinwell 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 Zinwell will offset losses from the drop in Zinwell's long position.The idea behind Min Aik Technology and Zinwell 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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