Correlation Between MKS Instruments and AERWINS Technologies

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

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

Diversification Opportunities for MKS Instruments and AERWINS Technologies

0.2

Correlation Coefficient

MKS Instruments  AERWINS Technologies

Modest diversification

The 3 months correlation between MKS and AERWINS is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding MKS Instruments and AERWINS Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AERWINS Technologies and MKS Instruments 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 MKS Instruments are associated (or correlated) with AERWINS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AERWINS Technologies has no effect on the direction of MKS Instruments i.e., MKS Instruments and AERWINS Technologies go up and down completely randomly.

Pair Corralation between MKS Instruments and AERWINS Technologies

Given the investment horizon of 90 days MKS Instruments is expected to generate 17.87 times less return on investment than AERWINS Technologies. But when comparing it to its historical volatility, MKS Instruments is 9.34 times less risky than AERWINS Technologies. It trades about 0.04 of its potential returns per unit of risk. AERWINS Technologies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  15.00  in AERWINS Technologies on September 13, 2024 and sell it today you would lose (14.42) from holding AERWINS Technologies or give up 96.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	68.28%
Values	Daily Returns

MKS Instruments  vs.  AERWINS Technologies

MKS Instruments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MKS Instruments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, MKS Instruments is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

AERWINS Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with MKS Instruments and AERWINS Technologies

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

The idea behind MKS Instruments and AERWINS Technologies 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.