Correlation Between MKDWELL Tech and Flowserve

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

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

Diversification Opportunities for MKDWELL Tech and Flowserve

0.14

Correlation Coefficient

MKDWELL Tech  Flowserve

Average diversification

The 3 months correlation between MKDWELL and Flowserve is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding MKDWELL Tech Warrants and Flowserve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flowserve and MKDWELL Tech 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 MKDWELL Tech Warrants are associated (or correlated) with Flowserve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flowserve has no effect on the direction of MKDWELL Tech i.e., MKDWELL Tech and Flowserve go up and down completely randomly.

Pair Corralation between MKDWELL Tech and Flowserve

Assuming the 90 days horizon MKDWELL Tech Warrants is expected to generate 6.26 times more return on investment than Flowserve. However, MKDWELL Tech is 6.26 times more volatile than Flowserve. It trades about 0.15 of its potential returns per unit of risk. Flowserve is currently generating about 0.11 per unit of risk. If you would invest  1.00  in MKDWELL Tech Warrants on May 5, 2025 and sell it today you would earn a total of  0.54  from holding MKDWELL Tech Warrants or generate 54.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	57.14%
Values	Daily Returns

MKDWELL Tech Warrants  vs.  Flowserve

MKDWELL Tech Warrants

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MKDWELL Tech Warrants are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, MKDWELL Tech showed solid returns over the last few months and may actually be approaching a breakup point.

Flowserve

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Flowserve are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Flowserve unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MKDWELL Tech and Flowserve

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

The idea behind MKDWELL Tech Warrants and Flowserve 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.