Correlation Between MIC Electronics and GACM Technologies

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

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

Diversification Opportunities for MIC Electronics and GACM Technologies

0.71

Correlation Coefficient

MIC Electronics  GACM Technologies

Poor diversification

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

Pair Corralation between MIC Electronics and GACM Technologies

Assuming the 90 days trading horizon MIC Electronics Limited is expected to generate 0.78 times more return on investment than GACM Technologies. However, MIC Electronics Limited is 1.28 times less risky than GACM Technologies. It trades about -0.05 of its potential returns per unit of risk. GACM Technologies Limited is currently generating about -0.17 per unit of risk. If you would invest  6,002  in MIC Electronics Limited on April 24, 2025 and sell it today you would lose (761.00) from holding MIC Electronics Limited or give up 12.68% of portfolio value over 90 days.

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

MIC Electronics Limited  vs.  GACM Technologies Limited

MIC Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days MIC Electronics Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

GACM Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days GACM Technologies Limited 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 fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with MIC Electronics and GACM Technologies

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

The idea behind MIC Electronics Limited and GACM Technologies Limited 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.