Correlation Between Castles Technology and Min Aik

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

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

Diversification Opportunities for Castles Technology and Min Aik

0.76

Correlation Coefficient

Castles Technology  Min Aik

Poor diversification

The 3 months correlation between Castles and Min is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Castles Technology Co and Min Aik Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Min Aik Technology and Castles Technology 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 Castles Technology Co are associated (or correlated) with Min Aik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Min Aik Technology has no effect on the direction of Castles Technology i.e., Castles Technology and Min Aik go up and down completely randomly.

Pair Corralation between Castles Technology and Min Aik

Assuming the 90 days trading horizon Castles Technology Co is expected to generate 1.12 times more return on investment than Min Aik. However, Castles Technology is 1.12 times more volatile than Min Aik Technology. It trades about 0.04 of its potential returns per unit of risk. Min Aik Technology is currently generating about 0.05 per unit of risk. If you would invest  5,740  in Castles Technology Co on September 21, 2024 and sell it today you would earn a total of  2,560  from holding Castles Technology Co or generate 44.6% return on investment over 90 days.

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

Castles Technology Co  vs.  Min Aik Technology

Castles Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Castles Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

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 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 Castles Technology and Min Aik

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

The idea behind Castles Technology Co and Min Aik 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.