Correlation Between Min Aik and Univacco Technology

Can any of the company-specific risk be diversified away by investing in both Min Aik and Univacco 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 Min Aik and Univacco Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Min Aik Technology and Univacco Technology, you can compare the effects of market volatilities on Min Aik and Univacco 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 Min Aik with a short position of Univacco Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Min Aik and Univacco Technology.

Diversification Opportunities for Min Aik and Univacco Technology

0.4

Correlation Coefficient

Min Aik  Univacco Technology

Very weak diversification

The 3 months correlation between Min and Univacco is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and Univacco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univacco Technology and Min Aik 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 Min Aik Technology are associated (or correlated) with Univacco Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univacco Technology has no effect on the direction of Min Aik i.e., Min Aik and Univacco Technology go up and down completely randomly.

Pair Corralation between Min Aik and Univacco Technology

Assuming the 90 days trading horizon Min Aik Technology is expected to generate 1.32 times more return on investment than Univacco Technology. However, Min Aik is 1.32 times more volatile than Univacco Technology. It trades about 0.12 of its potential returns per unit of risk. Univacco Technology is currently generating about -0.28 per unit of risk. If you would invest  2,410  in Min Aik Technology on September 27, 2024 and sell it today you would earn a total of  160.00  from holding Min Aik Technology or generate 6.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Min Aik Technology  vs.  Univacco Technology

Min Aik Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Min Aik Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Min Aik is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Univacco Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Univacco Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Min Aik and Univacco Technology

The main advantage of trading using opposite Min Aik and Univacco Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Min Aik position performs unexpectedly, Univacco 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 Univacco Technology will offset losses from the drop in Univacco Technology's long position.

The idea behind Min Aik Technology and Univacco 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.