Correlation Between Alarum Technologies and MicroAlgo

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

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

Diversification Opportunities for Alarum Technologies and MicroAlgo

0.81

Correlation Coefficient

Alarum Technologies  MicroAlgo

Very poor diversification

The 3 months correlation between Alarum and MicroAlgo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Alarum Technologies and MicroAlgo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroAlgo and Alarum Technologies 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 Alarum Technologies are associated (or correlated) with MicroAlgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroAlgo has no effect on the direction of Alarum Technologies i.e., Alarum Technologies and MicroAlgo go up and down completely randomly.

Pair Corralation between Alarum Technologies and MicroAlgo

Given the investment horizon of 90 days Alarum Technologies is expected to under-perform the MicroAlgo. But the stock apears to be less risky and, when comparing its historical volatility, Alarum Technologies is 7.92 times less risky than MicroAlgo. The stock trades about 0.0 of its potential returns per unit of risk. The MicroAlgo is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  5,430  in MicroAlgo on September 16, 2025 and sell it today you would lose (4,747) from holding MicroAlgo or give up 87.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.6%
Values	Daily Returns

Alarum Technologies  vs.  MicroAlgo

Alarum Technologies

Risk-Adjusted Performance

Weakest

Over the last 90 days Alarum Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2026. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2026. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Alarum Technologies and MicroAlgo

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

The idea behind Alarum Technologies and MicroAlgo 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.