Correlation Between MMTEC and Alkami Technology
Can any of the company-specific risk be diversified away by investing in both MMTEC and Alkami 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 MMTEC and Alkami Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MMTEC Inc and Alkami Technology, you can compare the effects of market volatilities on MMTEC and Alkami 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 MMTEC with a short position of Alkami Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MMTEC and Alkami Technology.
Diversification Opportunities for MMTEC and Alkami Technology
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MMTEC and Alkami is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding MMTEC Inc and Alkami Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkami Technology and MMTEC 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 MMTEC Inc are associated (or correlated) with Alkami Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkami Technology has no effect on the direction of MMTEC i.e., MMTEC and Alkami Technology go up and down completely randomly.
Pair Corralation between MMTEC and Alkami Technology
Considering the 90-day investment horizon MMTEC Inc is expected to under-perform the Alkami Technology. In addition to that, MMTEC is 2.21 times more volatile than Alkami Technology. It trades about -0.33 of its total potential returns per unit of risk. Alkami Technology is currently generating about 0.15 per unit of volatility. If you would invest 3,877 in Alkami Technology on August 28, 2024 and sell it today you would earn a total of 345.00 from holding Alkami Technology or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MMTEC Inc vs. Alkami Technology
Performance |
| Timeline |
| MMTEC Inc |
| Alkami Technology |
MMTEC and Alkami Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MMTEC and Alkami Technology
The main advantage of trading using opposite MMTEC and Alkami Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MMTEC position performs unexpectedly, Alkami 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 Alkami Technology will offset losses from the drop in Alkami Technology's long position.The idea behind MMTEC Inc and Alkami Technology 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.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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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