Correlation Between Integrated Micro and Top Frontier
Can any of the company-specific risk be diversified away by investing in both Integrated Micro and Top Frontier 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 Integrated Micro and Top Frontier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Micro Electronics and Top Frontier Investment, you can compare the effects of market volatilities on Integrated Micro and Top Frontier 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 Integrated Micro with a short position of Top Frontier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Micro and Top Frontier.
Diversification Opportunities for Integrated Micro and Top Frontier
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Integrated and Top is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Micro Electronics and Top Frontier Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Frontier Investment and Integrated Micro 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 Integrated Micro Electronics are associated (or correlated) with Top Frontier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Frontier Investment has no effect on the direction of Integrated Micro i.e., Integrated Micro and Top Frontier go up and down completely randomly.
Pair Corralation between Integrated Micro and Top Frontier
Assuming the 90 days trading horizon Integrated Micro Electronics is expected to under-perform the Top Frontier. But the stock apears to be less risky and, when comparing its historical volatility, Integrated Micro Electronics is 1.47 times less risky than Top Frontier. The stock trades about -0.16 of its potential returns per unit of risk. The Top Frontier Investment is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6,770 in Top Frontier Investment on August 27, 2024 and sell it today you would earn a total of 60.00 from holding Top Frontier Investment or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.0% |
| Values | Daily Returns |
Integrated Micro Electronics vs. Top Frontier Investment
Performance |
| Timeline |
| Integrated Micro Ele |
| Top Frontier Investment |
Integrated Micro and Top Frontier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Micro and Top Frontier
The main advantage of trading using opposite Integrated Micro and Top Frontier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Micro position performs unexpectedly, Top Frontier 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 Top Frontier will offset losses from the drop in Top Frontier's long position.| Integrated Micro vs. Philex Mining Corp | Integrated Micro vs. Semirara Mining Corp | Integrated Micro vs. Atlas Consolidated Mining | Integrated Micro vs. Philippine Business Bank |
| Top Frontier vs. Allhome Corp | Top Frontier vs. Altus Property Ventures | Top Frontier vs. AgriNurture | Top Frontier vs. Wilcon Depot |
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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