Correlation Between Advanced Technology and Jilin OLED
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By analyzing existing cross correlation between Advanced Technology Materials and Jilin OLED Material, you can compare the effects of market volatilities on Advanced Technology and Jilin OLED 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 Advanced Technology with a short position of Jilin OLED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Technology and Jilin OLED.
Diversification Opportunities for Advanced Technology and Jilin OLED
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Advanced and Jilin is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Technology Materials and Jilin OLED Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jilin OLED Material and Advanced Technology 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 Advanced Technology Materials are associated (or correlated) with Jilin OLED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jilin OLED Material has no effect on the direction of Advanced Technology i.e., Advanced Technology and Jilin OLED go up and down completely randomly.
Pair Corralation between Advanced Technology and Jilin OLED
Assuming the 90 days trading horizon Advanced Technology Materials is expected to generate 0.93 times more return on investment than Jilin OLED. However, Advanced Technology Materials is 1.07 times less risky than Jilin OLED. It trades about 0.2 of its potential returns per unit of risk. Jilin OLED Material is currently generating about 0.07 per unit of risk. If you would invest 1,056 in Advanced Technology Materials on November 7, 2024 and sell it today you would earn a total of 96.00 from holding Advanced Technology Materials or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Technology Materials vs. Jilin OLED Material
Performance |
| Timeline |
| Advanced Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Jilin OLED Material |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Advanced Technology and Jilin OLED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Technology and Jilin OLED
The main advantage of trading using opposite Advanced Technology and Jilin OLED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Technology position performs unexpectedly, Jilin OLED 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 Jilin OLED will offset losses from the drop in Jilin OLED's long position.The idea behind Advanced Technology Materials and Jilin OLED Material 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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