Correlation Between Min Aik and Cipherlab
Can any of the company-specific risk be diversified away by investing in both Min Aik and Cipherlab 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 Cipherlab 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 Cipherlab Co, you can compare the effects of market volatilities on Min Aik and Cipherlab 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 Cipherlab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Min Aik and Cipherlab.
Diversification Opportunities for Min Aik and Cipherlab
Poor diversification
The 3 months correlation between Min and Cipherlab is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and Cipherlab Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipherlab 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 Cipherlab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipherlab has no effect on the direction of Min Aik i.e., Min Aik and Cipherlab go up and down completely randomly.
Pair Corralation between Min Aik and Cipherlab
Assuming the 90 days trading horizon Min Aik is expected to generate 1.11 times less return on investment than Cipherlab. But when comparing it to its historical volatility, Min Aik Technology is 1.15 times less risky than Cipherlab. It trades about 0.04 of its potential returns per unit of risk. Cipherlab Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,679 in Cipherlab Co on October 13, 2024 and sell it today you would earn a total of 726.00 from holding Cipherlab Co or generate 43.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Min Aik Technology vs. Cipherlab Co
Performance |
| Timeline |
| Min Aik Technology |
| Cipherlab |
Min Aik and Cipherlab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Min Aik and Cipherlab
The main advantage of trading using opposite Min Aik and Cipherlab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Min Aik position performs unexpectedly, Cipherlab 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 Cipherlab will offset losses from the drop in Cipherlab's long position.| Min Aik vs. Promise Technology | Min Aik vs. Spirox Corp | Min Aik vs. Zinwell | Min Aik vs. Gigastorage Corp |
| Cipherlab vs. AVerMedia Technologies | Cipherlab vs. Min Aik Technology | Cipherlab vs. Uniform Industrial Corp | Cipherlab vs. Information Technology Total |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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