Correlation Between Min Aik and King Chou
Can any of the company-specific risk be diversified away by investing in both Min Aik and King Chou 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 King Chou 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 King Chou Marine, you can compare the effects of market volatilities on Min Aik and King Chou 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 King Chou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Min Aik and King Chou.
Diversification Opportunities for Min Aik and King Chou
Good diversification
The 3 months correlation between Min and King is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and King Chou Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on King Chou Marine 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 King Chou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of King Chou Marine has no effect on the direction of Min Aik i.e., Min Aik and King Chou go up and down completely randomly.
Pair Corralation between Min Aik and King Chou
Assuming the 90 days trading horizon Min Aik Technology is expected to generate 4.25 times more return on investment than King Chou. However, Min Aik is 4.25 times more volatile than King Chou Marine. It trades about 0.03 of its potential returns per unit of risk. King Chou Marine is currently generating about 0.04 per unit of risk. If you would invest 2,005 in Min Aik Technology on September 14, 2024 and sell it today you would earn a total of 280.00 from holding Min Aik Technology or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.62% |
| Values | Daily Returns |
Min Aik Technology vs. King Chou Marine
Performance |
| Timeline |
| Min Aik Technology |
| King Chou Marine |
Min Aik and King Chou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Min Aik and King Chou
The main advantage of trading using opposite Min Aik and King Chou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Min Aik position performs unexpectedly, King Chou 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 King Chou will offset losses from the drop in King Chou's long position.| Min Aik vs. AU Optronics | Min Aik vs. Innolux Corp | Min Aik vs. Ruentex Development Co | Min Aik vs. WiseChip Semiconductor |
| King Chou vs. Dadi Early Childhood Education | King Chou vs. Weltrend Semiconductor | King Chou vs. Min Aik Technology | King Chou vs. Vate Technology Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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