Correlation Between MI Technovation and Dufu Tech
Can any of the company-specific risk be diversified away by investing in both MI Technovation and Dufu Tech 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 MI Technovation and Dufu Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MI Technovation Bhd and Dufu Tech Corp, you can compare the effects of market volatilities on MI Technovation and Dufu Tech 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 MI Technovation with a short position of Dufu Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of MI Technovation and Dufu Tech.
Diversification Opportunities for MI Technovation and Dufu Tech
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 5286 and Dufu is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding MI Technovation Bhd and Dufu Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dufu Tech Corp and MI Technovation 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 MI Technovation Bhd are associated (or correlated) with Dufu Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dufu Tech Corp has no effect on the direction of MI Technovation i.e., MI Technovation and Dufu Tech go up and down completely randomly.
Pair Corralation between MI Technovation and Dufu Tech
Assuming the 90 days trading horizon MI Technovation Bhd is expected to generate 1.04 times more return on investment than Dufu Tech. However, MI Technovation is 1.04 times more volatile than Dufu Tech Corp. It trades about 0.05 of its potential returns per unit of risk. Dufu Tech Corp is currently generating about 0.02 per unit of risk. If you would invest 172.00 in MI Technovation Bhd on September 12, 2024 and sell it today you would earn a total of 48.00 from holding MI Technovation Bhd or generate 27.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MI Technovation Bhd vs. Dufu Tech Corp
Performance |
| Timeline |
| MI Technovation Bhd |
| Dufu Tech Corp |
MI Technovation and Dufu Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MI Technovation and Dufu Tech
The main advantage of trading using opposite MI Technovation and Dufu Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MI Technovation position performs unexpectedly, Dufu Tech 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 Dufu Tech will offset losses from the drop in Dufu Tech's long position.| MI Technovation vs. Globetronics Tech Bhd | MI Technovation vs. Al Aqar Healthcare | MI Technovation vs. PMB Technology Bhd | MI Technovation vs. Digistar Bhd |
| Dufu Tech vs. PIE Industrial Bhd | Dufu Tech vs. Kobay Tech Bhd | Dufu Tech vs. JF Technology BHD | Dufu Tech vs. CB Industrial Product |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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