Correlation Between Min Aik and ALi Corp
Can any of the company-specific risk be diversified away by investing in both Min Aik and ALi Corp 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 ALi Corp 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 ALi Corp, you can compare the effects of market volatilities on Min Aik and ALi Corp 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 ALi Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Min Aik and ALi Corp.
Diversification Opportunities for Min Aik and ALi Corp
Significant diversification
The 3 months correlation between Min and ALi is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and ALi Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALi 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 ALi Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALi Corp has no effect on the direction of Min Aik i.e., Min Aik and ALi Corp go up and down completely randomly.
Pair Corralation between Min Aik and ALi Corp
Assuming the 90 days trading horizon Min Aik Technology is expected to generate 0.75 times more return on investment than ALi Corp. However, Min Aik Technology is 1.33 times less risky than ALi Corp. It trades about -0.27 of its potential returns per unit of risk. ALi Corp is currently generating about -0.22 per unit of risk. If you would invest 2,800 in Min Aik Technology on August 29, 2024 and sell it today you would lose (390.00) from holding Min Aik Technology or give up 13.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Min Aik Technology vs. ALi Corp
Performance |
| Timeline |
| Min Aik Technology |
| ALi Corp |
Min Aik and ALi Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Min Aik and ALi Corp
The main advantage of trading using opposite Min Aik and ALi Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Min Aik position performs unexpectedly, ALi Corp 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 ALi Corp will offset losses from the drop in ALi Corp's long position.| Min Aik vs. Promise Technology | Min Aik vs. Spirox Corp | Min Aik vs. Zinwell | Min Aik vs. Gigastorage Corp |
| ALi Corp vs. Sunplus Technology Co | ALi Corp vs. Silicon Integrated Systems | ALi Corp vs. Zinwell | ALi Corp vs. Altek 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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