Correlation Between Mr D and Inari Amertron

Can any of the company-specific risk be diversified away by investing in both Mr D and Inari Amertron 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 Mr D and Inari Amertron into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mr D I and Inari Amertron Bhd, you can compare the effects of market volatilities on Mr D and Inari Amertron 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 Mr D with a short position of Inari Amertron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mr D and Inari Amertron.

Diversification Opportunities for Mr D and Inari Amertron

-0.39

Correlation Coefficient

Mr D  Inari Amertron

Very good diversification

The 3 months correlation between 5296 and Inari is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Mr D I and Inari Amertron Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inari Amertron Bhd and Mr D 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 Mr D I are associated (or correlated) with Inari Amertron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inari Amertron Bhd has no effect on the direction of Mr D i.e., Mr D and Inari Amertron go up and down completely randomly.

Pair Corralation between Mr D and Inari Amertron

Assuming the 90 days trading horizon Mr D I is expected to under-perform the Inari Amertron. In addition to that, Mr D is 1.01 times more volatile than Inari Amertron Bhd. It trades about -0.11 of its total potential returns per unit of risk. Inari Amertron Bhd is currently generating about 0.04 per unit of volatility. If you would invest  294.00  in Inari Amertron Bhd on September 26, 2024 and sell it today you would earn a total of  11.00  from holding Inari Amertron Bhd or generate 3.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Mr D I  vs.  Inari Amertron Bhd

Mr D I

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mr D I has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Inari Amertron Bhd

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Inari Amertron Bhd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Inari Amertron is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Mr D and Inari Amertron

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

The idea behind Mr D I and Inari Amertron Bhd 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.