Correlation Between SS TECH and Adaptive Plasma
Can any of the company-specific risk be diversified away by investing in both SS TECH and Adaptive Plasma 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 SS TECH and Adaptive Plasma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and Adaptive Plasma Technology, you can compare the effects of market volatilities on SS TECH and Adaptive Plasma 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 SS TECH with a short position of Adaptive Plasma. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and Adaptive Plasma.
Diversification Opportunities for SS TECH and Adaptive Plasma
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 101490 and Adaptive is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and Adaptive Plasma Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptive Plasma Tech and SS TECH 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 SS TECH are associated (or correlated) with Adaptive Plasma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptive Plasma Tech has no effect on the direction of SS TECH i.e., SS TECH and Adaptive Plasma go up and down completely randomly.
Pair Corralation between SS TECH and Adaptive Plasma
Assuming the 90 days trading horizon SS TECH is expected to under-perform the Adaptive Plasma. But the stock apears to be less risky and, when comparing its historical volatility, SS TECH is 1.03 times less risky than Adaptive Plasma. The stock trades about -0.06 of its potential returns per unit of risk. The Adaptive Plasma Technology is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,466,000 in Adaptive Plasma Technology on August 31, 2024 and sell it today you would lose (828,000) from holding Adaptive Plasma Technology or give up 56.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. Adaptive Plasma Technology
Performance |
| Timeline |
| SS TECH |
| Adaptive Plasma Tech |
SS TECH and Adaptive Plasma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and Adaptive Plasma
The main advantage of trading using opposite SS TECH and Adaptive Plasma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH position performs unexpectedly, Adaptive Plasma 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 Adaptive Plasma will offset losses from the drop in Adaptive Plasma's long position.| SS TECH vs. Dongsin Engineering Construction | SS TECH vs. Doosan Fuel Cell | SS TECH vs. Daishin Balance 1 | SS TECH vs. Total Soft Bank |
| Adaptive Plasma vs. SK Hynix | Adaptive Plasma vs. LX Semicon Co | Adaptive Plasma vs. Tokai Carbon Korea | Adaptive Plasma vs. People Technology |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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