Correlation Between Micro Imaging and First Growth

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

By analyzing existing cross correlation between Micro Imaging Technology and First Growth Funds, you can compare the effects of market volatilities on Micro Imaging and First Growth 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 Micro Imaging with a short position of First Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micro Imaging and First Growth.

Diversification Opportunities for Micro Imaging and First Growth

1.0

Correlation Coefficient

Micro Imaging  First Growth

No risk reduction

The 3 months correlation between Micro and First is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Micro Imaging Technology and First Growth Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Growth Funds and Micro Imaging 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 Micro Imaging Technology are associated (or correlated) with First Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Growth Funds has no effect on the direction of Micro Imaging i.e., Micro Imaging and First Growth go up and down completely randomly.

Pair Corralation between Micro Imaging and First Growth

If you would invest  0.90  in First Growth Funds on May 18, 2025 and sell it today you would earn a total of  0.00  from holding First Growth Funds or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Micro Imaging Technology  vs.  First Growth Funds

Micro Imaging Technology

Risk-Adjusted Performance

Weakest

Over the last 90 days Micro Imaging Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Micro Imaging is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

First Growth Funds

Risk-Adjusted Performance

Weakest

Over the last 90 days First Growth Funds has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, First Growth is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Micro Imaging and First Growth

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

The idea behind Micro Imaging Technology and First Growth Funds 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.