Correlation Between Astar and MIC Electronics
Can any of the company-specific risk be diversified away by investing in both Astar and MIC Electronics 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 Astar and MIC Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and MIC Electronics Limited, you can compare the effects of market volatilities on Astar and MIC Electronics 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 Astar with a short position of MIC Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and MIC Electronics.
Diversification Opportunities for Astar and MIC Electronics
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Astar and MIC is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Astar and MIC Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIC Electronics and Astar 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 Astar are associated (or correlated) with MIC Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIC Electronics has no effect on the direction of Astar i.e., Astar and MIC Electronics go up and down completely randomly.
Pair Corralation between Astar and MIC Electronics
Assuming the 90 days trading horizon Astar is expected to under-perform the MIC Electronics. In addition to that, Astar is 1.67 times more volatile than MIC Electronics Limited. It trades about 0.0 of its total potential returns per unit of risk. MIC Electronics Limited is currently generating about 0.01 per unit of volatility. If you would invest 8,031 in MIC Electronics Limited on November 2, 2024 and sell it today you would lose (204.00) from holding MIC Electronics Limited or give up 2.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.2% |
| Values | Daily Returns |
Astar vs. MIC Electronics Limited
Performance |
| Timeline |
| Astar |
| MIC Electronics |
Astar and MIC Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and MIC Electronics
The main advantage of trading using opposite Astar and MIC Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, MIC Electronics 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 MIC Electronics will offset losses from the drop in MIC Electronics' long position.The idea behind Astar and MIC Electronics Limited 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.| MIC Electronics vs. Cybertech Systems And | MIC Electronics vs. PB Fintech Limited | MIC Electronics vs. Unitech Limited | MIC Electronics vs. Cambridge Technology Enterprises |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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