Correlation Between Merida Industry and Andes Technology
Can any of the company-specific risk be diversified away by investing in both Merida Industry and Andes Technology 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 Merida Industry and Andes Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merida Industry Co and Andes Technology Corp, you can compare the effects of market volatilities on Merida Industry and Andes Technology 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 Merida Industry with a short position of Andes Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merida Industry and Andes Technology.
Diversification Opportunities for Merida Industry and Andes Technology
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merida and Andes is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Merida Industry Co and Andes Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andes Technology Corp and Merida Industry 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 Merida Industry Co are associated (or correlated) with Andes Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andes Technology Corp has no effect on the direction of Merida Industry i.e., Merida Industry and Andes Technology go up and down completely randomly.
Pair Corralation between Merida Industry and Andes Technology
Assuming the 90 days trading horizon Merida Industry Co is expected to under-perform the Andes Technology. In addition to that, Merida Industry is 1.03 times more volatile than Andes Technology Corp. It trades about -0.19 of its total potential returns per unit of risk. Andes Technology Corp is currently generating about -0.15 per unit of volatility. If you would invest 39,700 in Andes Technology Corp on September 1, 2024 and sell it today you would lose (3,100) from holding Andes Technology Corp or give up 7.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merida Industry Co vs. Andes Technology Corp
Performance |
| Timeline |
| Merida Industry |
| Andes Technology Corp |
Merida Industry and Andes Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merida Industry and Andes Technology
The main advantage of trading using opposite Merida Industry and Andes Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merida Industry position performs unexpectedly, Andes Technology 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 Andes Technology will offset losses from the drop in Andes Technology's long position.| Merida Industry vs. Chaintech Technology Corp | Merida Industry vs. AVerMedia Technologies | Merida Industry vs. Avision | Merida Industry vs. Clevo Co |
| Andes Technology vs. Cameo Communications | Andes Technology vs. Arima Communications Corp | Andes Technology vs. Cheng Mei Materials | Andes Technology vs. Nankang Rubber Tire |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |