Correlation Between Mauna Kea and Mediantechn

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

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

Diversification Opportunities for Mauna Kea and Mediantechn

0.67

Correlation Coefficient

Mauna Kea  Mediantechn

Poor diversification

The 3 months correlation between Mauna and Mediantechn is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mauna Kea Technologies and Mediantechn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediantechn and Mauna Kea 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 Mauna Kea Technologies are associated (or correlated) with Mediantechn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediantechn has no effect on the direction of Mauna Kea i.e., Mauna Kea and Mediantechn go up and down completely randomly.

Pair Corralation between Mauna Kea and Mediantechn

Assuming the 90 days trading horizon Mauna Kea Technologies is expected to under-perform the Mediantechn. But the stock apears to be less risky and, when comparing its historical volatility, Mauna Kea Technologies is 1.15 times less risky than Mediantechn. The stock trades about -0.31 of its potential returns per unit of risk. The Mediantechn is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  435.00  in Mediantechn on September 29, 2024 and sell it today you would lose (63.00) from holding Mediantechn or give up 14.48% of portfolio value over 90 days.

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

Mauna Kea Technologies  vs.  Mediantechn

Mauna Kea Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mauna Kea Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Mediantechn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mediantechn has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Mauna Kea and Mediantechn

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

The idea behind Mauna Kea Technologies and Mediantechn 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.