Correlation Between Dufu Tech and MI Technovation
Can any of the company-specific risk be diversified away by investing in both Dufu Tech and MI Technovation 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 Dufu Tech and MI Technovation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dufu Tech Corp and MI Technovation Bhd, you can compare the effects of market volatilities on Dufu Tech and MI Technovation 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 Dufu Tech with a short position of MI Technovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dufu Tech and MI Technovation.
Diversification Opportunities for Dufu Tech and MI Technovation
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dufu and 5286 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dufu Tech Corp and MI Technovation Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MI Technovation Bhd and Dufu Tech 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 Dufu Tech Corp are associated (or correlated) with MI Technovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MI Technovation Bhd has no effect on the direction of Dufu Tech i.e., Dufu Tech and MI Technovation go up and down completely randomly.
Pair Corralation between Dufu Tech and MI Technovation
Assuming the 90 days trading horizon Dufu Tech is expected to generate 2.96 times less return on investment than MI Technovation. But when comparing it to its historical volatility, Dufu Tech Corp is 1.04 times less risky than MI Technovation. It trades about 0.02 of its potential returns per unit of risk. MI Technovation Bhd is currently generating about 0.05 of returns per unit of risk over similar time horizon. 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 |
Dufu Tech Corp vs. MI Technovation Bhd
Performance |
| Timeline |
| Dufu Tech Corp |
| MI Technovation Bhd |
Dufu Tech and MI Technovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dufu Tech and MI Technovation
The main advantage of trading using opposite Dufu Tech and MI Technovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dufu Tech position performs unexpectedly, MI Technovation 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 MI Technovation will offset losses from the drop in MI Technovation's long position.| Dufu Tech vs. PIE Industrial Bhd | Dufu Tech vs. Kobay Tech Bhd | Dufu Tech vs. JF Technology BHD | Dufu Tech vs. CB Industrial Product |
| MI Technovation vs. Globetronics Tech Bhd | MI Technovation vs. Al Aqar Healthcare | MI Technovation vs. PMB Technology Bhd | MI Technovation vs. Digistar Bhd |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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