Correlation Between MayAir Technology and Linewell Software

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

Diversification Opportunities for MayAir Technology and Linewell Software

0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between MayAir and Linewell is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding MayAir Technology Co and Linewell Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linewell Software and MayAir Technology 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 MayAir Technology Co are associated (or correlated) with Linewell Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linewell Software has no effect on the direction of MayAir Technology i.e., MayAir Technology and Linewell Software go up and down completely randomly.

Pair Corralation between MayAir Technology and Linewell Software

Assuming the 90 days trading horizon MayAir Technology Co is expected to generate 1.16 times more return on investment than Linewell Software. However, MayAir Technology is 1.16 times more volatile than Linewell Software Co. It trades about -0.04 of its potential returns per unit of risk. Linewell Software Co is currently generating about -0.17 per unit of risk. If you would invest  3,814  in MayAir Technology Co on January 28, 2025 and sell it today you would lose (163.00) from holding MayAir Technology Co or give up 4.27% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

MayAir Technology Co  vs.  Linewell Software Co

 Performance 
       Timeline  
MayAir Technology 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in MayAir Technology Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MayAir Technology may actually be approaching a critical reversion point that can send shares even higher in May 2025.
Linewell Software 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Linewell Software Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MayAir Technology and Linewell Software Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MayAir Technology and Linewell Software

The main advantage of trading using opposite MayAir Technology and Linewell Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MayAir Technology position performs unexpectedly, Linewell Software 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 Linewell Software will offset losses from the drop in Linewell Software's long position.
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The idea behind MayAir Technology Co and Linewell Software Co 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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