Correlation Between Min Aik and E Lead
Can any of the company-specific risk be diversified away by investing in both Min Aik and E Lead 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 E Lead 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 E Lead Electronic Co, you can compare the effects of market volatilities on Min Aik and E Lead 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 E Lead. Check out your portfolio center. Please also check ongoing floating volatility patterns of Min Aik and E Lead.
Diversification Opportunities for Min Aik and E Lead
Very poor diversification
The 3 months correlation between Min and 2497 is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and E Lead Electronic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Lead Electronic 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 E Lead. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Lead Electronic has no effect on the direction of Min Aik i.e., Min Aik and E Lead go up and down completely randomly.
Pair Corralation between Min Aik and E Lead
Assuming the 90 days trading horizon Min Aik Technology is expected to generate 1.21 times more return on investment than E Lead. However, Min Aik is 1.21 times more volatile than E Lead Electronic Co. It trades about 0.04 of its potential returns per unit of risk. E Lead Electronic Co is currently generating about -0.01 per unit of risk. If you would invest 1,641 in Min Aik Technology on October 13, 2024 and sell it today you would earn a total of 694.00 from holding Min Aik Technology or generate 42.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Min Aik Technology vs. E Lead Electronic Co
Performance |
| Timeline |
| Min Aik Technology |
| E Lead Electronic |
Min Aik and E Lead Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Min Aik and E Lead
The main advantage of trading using opposite Min Aik and E Lead positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Min Aik position performs unexpectedly, E Lead 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 E Lead will offset losses from the drop in E Lead's long position.| Min Aik vs. Promise Technology | Min Aik vs. Spirox Corp | Min Aik vs. Zinwell | Min Aik vs. Gigastorage Corp |
| E Lead vs. Weltrend Semiconductor | E Lead vs. Catcher Technology Co | E Lead vs. Cub Elecparts | E Lead vs. Elan Microelectronics Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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