Correlation Between Alcor Micro and Ma Kuang

Can any of the company-specific risk be diversified away by investing in both Alcor Micro and Ma Kuang 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 Alcor Micro and Ma Kuang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alcor Micro and Ma Kuang Healthcare, you can compare the effects of market volatilities on Alcor Micro and Ma Kuang 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 Alcor Micro with a short position of Ma Kuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcor Micro and Ma Kuang.

Diversification Opportunities for Alcor Micro and Ma Kuang

0.4

Correlation Coefficient

Alcor Micro  Ma Kuang

Very weak diversification

The 3 months correlation between Alcor and 4139 is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Alcor Micro and Ma Kuang Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ma Kuang Healthcare and Alcor Micro 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 Alcor Micro are associated (or correlated) with Ma Kuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ma Kuang Healthcare has no effect on the direction of Alcor Micro i.e., Alcor Micro and Ma Kuang go up and down completely randomly.

Pair Corralation between Alcor Micro and Ma Kuang

Assuming the 90 days trading horizon Alcor Micro is expected to under-perform the Ma Kuang. In addition to that, Alcor Micro is 1.07 times more volatile than Ma Kuang Healthcare. It trades about -0.01 of its total potential returns per unit of risk. Ma Kuang Healthcare is currently generating about -0.01 per unit of volatility. If you would invest  3,110  in Ma Kuang Healthcare on September 16, 2024 and sell it today you would lose (115.00) from holding Ma Kuang Healthcare or give up 3.7% of portfolio value over 90 days.

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

Alcor Micro  vs.  Ma Kuang Healthcare

Alcor Micro

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ma Kuang Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Alcor Micro and Ma Kuang

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

The idea behind Alcor Micro and Ma Kuang Healthcare 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.