Correlation Between MicroAlgo and Alarum Technologies

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

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

Diversification Opportunities for MicroAlgo and Alarum Technologies

-0.85

Correlation Coefficient

MicroAlgo  Alarum Technologies

Pay attention - limited upside

The 3 months correlation between MicroAlgo and Alarum is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding MicroAlgo and Alarum Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alarum Technologies and MicroAlgo 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 MicroAlgo are associated (or correlated) with Alarum Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alarum Technologies has no effect on the direction of MicroAlgo i.e., MicroAlgo and Alarum Technologies go up and down completely randomly.

Pair Corralation between MicroAlgo and Alarum Technologies

Given the investment horizon of 90 days MicroAlgo is expected to under-perform the Alarum Technologies. In addition to that, MicroAlgo is 1.56 times more volatile than Alarum Technologies. It trades about -0.16 of its total potential returns per unit of risk. Alarum Technologies is currently generating about 0.19 per unit of volatility. If you would invest  815.00  in Alarum Technologies on May 20, 2025 and sell it today you would earn a total of  793.00  from holding Alarum Technologies or generate 97.3% return on investment over 90 days.

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

MicroAlgo  vs.  Alarum Technologies

MicroAlgo

Risk-Adjusted Performance

Weakest

Over the last 90 days MicroAlgo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Alarum Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alarum Technologies are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Alarum Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MicroAlgo and Alarum Technologies

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

The idea behind MicroAlgo and Alarum 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 Stocks Directory module to find actively traded stocks across global markets.