Correlation Between Holley and Mingteng International

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

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

Diversification Opportunities for Holley and Mingteng International

-0.71

Correlation Coefficient

Holley  Mingteng International

Pay attention - limited upside

The 3 months correlation between Holley and Mingteng is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Holley Inc and Mingteng International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mingteng International and Holley 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 Holley Inc are associated (or correlated) with Mingteng International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mingteng International has no effect on the direction of Holley i.e., Holley and Mingteng International go up and down completely randomly.

Pair Corralation between Holley and Mingteng International

Given the investment horizon of 90 days Holley Inc is expected to under-perform the Mingteng International. In addition to that, Holley is 1.69 times more volatile than Mingteng International. It trades about -0.11 of its total potential returns per unit of risk. Mingteng International is currently generating about 0.0 per unit of volatility. If you would invest  439.00  in Mingteng International on July 13, 2024 and sell it today you would lose (1.00) from holding Mingteng International or give up 0.23% of portfolio value over 90 days.

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

Holley Inc  vs.  Mingteng International

Holley Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Holley Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in November 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Mingteng International

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mingteng International are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Mingteng International displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Holley and Mingteng International

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

The idea behind Holley Inc and Mingteng International 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.