Correlation Between Manila Mining and Integrated Micro
Can any of the company-specific risk be diversified away by investing in both Manila Mining and Integrated Micro 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 Manila Mining and Integrated Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manila Mining Corp and Integrated Micro Electronics, you can compare the effects of market volatilities on Manila Mining and Integrated Micro 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 Manila Mining with a short position of Integrated Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manila Mining and Integrated Micro.
Diversification Opportunities for Manila Mining and Integrated Micro
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Manila and Integrated is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Manila Mining Corp and Integrated Micro Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Micro Ele and Manila Mining 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 Manila Mining Corp are associated (or correlated) with Integrated Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Micro Ele has no effect on the direction of Manila Mining i.e., Manila Mining and Integrated Micro go up and down completely randomly.
Pair Corralation between Manila Mining and Integrated Micro
Assuming the 90 days trading horizon Manila Mining Corp is expected to under-perform the Integrated Micro. But the stock apears to be less risky and, when comparing its historical volatility, Manila Mining Corp is 1.28 times less risky than Integrated Micro. The stock trades about -0.66 of its potential returns per unit of risk. The Integrated Micro Electronics is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 172.00 in Integrated Micro Electronics on September 1, 2024 and sell it today you would lose (9.00) from holding Integrated Micro Electronics or give up 5.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 52.38% |
| Values | Daily Returns |
Manila Mining Corp vs. Integrated Micro Electronics
Performance |
| Timeline |
| Manila Mining Corp |
| Integrated Micro Ele |
Manila Mining and Integrated Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manila Mining and Integrated Micro
The main advantage of trading using opposite Manila Mining and Integrated Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manila Mining position performs unexpectedly, Integrated Micro 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 Integrated Micro will offset losses from the drop in Integrated Micro's long position.The idea behind Manila Mining Corp and Integrated Micro Electronics 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.| Integrated Micro vs. GT Capital Holdings | Integrated Micro vs. Allhome Corp | Integrated Micro vs. Jollibee Foods Corp | Integrated Micro vs. LFM Properties Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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