Correlation Between Mycron Steel and Aurelius Technologies

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Can any of the company-specific risk be diversified away by investing in both Mycron Steel and Aurelius Technologies 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 Mycron Steel and Aurelius Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mycron Steel Bhd and Aurelius Technologies Bhd, you can compare the effects of market volatilities on Mycron Steel and Aurelius Technologies 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 Mycron Steel with a short position of Aurelius Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mycron Steel and Aurelius Technologies.

Diversification Opportunities for Mycron Steel and Aurelius Technologies

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Mycron and Aurelius is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mycron Steel Bhd and Aurelius Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelius Technologies Bhd and Mycron Steel 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 Mycron Steel Bhd are associated (or correlated) with Aurelius Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelius Technologies Bhd has no effect on the direction of Mycron Steel i.e., Mycron Steel and Aurelius Technologies go up and down completely randomly.

Pair Corralation between Mycron Steel and Aurelius Technologies

Assuming the 90 days trading horizon Mycron Steel is expected to generate 2.28 times less return on investment than Aurelius Technologies. In addition to that, Mycron Steel is 2.6 times more volatile than Aurelius Technologies Bhd. It trades about 0.02 of its total potential returns per unit of risk. Aurelius Technologies Bhd is currently generating about 0.1 per unit of volatility. If you would invest  296.00  in Aurelius Technologies Bhd on September 12, 2024 and sell it today you would earn a total of  9.00  from holding Aurelius Technologies Bhd or generate 3.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Mycron Steel Bhd  vs.  Aurelius Technologies Bhd

 Performance 
       Timeline  
Mycron Steel Bhd 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mycron Steel Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
Aurelius Technologies Bhd 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Aurelius Technologies Bhd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Aurelius Technologies is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Mycron Steel and Aurelius Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mycron Steel and Aurelius Technologies

The main advantage of trading using opposite Mycron Steel and Aurelius Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mycron Steel position performs unexpectedly, Aurelius Technologies 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 Aurelius Technologies will offset losses from the drop in Aurelius Technologies' long position.
The idea behind Mycron Steel Bhd and Aurelius Technologies Bhd 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.
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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