Correlation Between An Shin and ADLINK Technology
Can any of the company-specific risk be diversified away by investing in both An Shin and ADLINK Technology 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 An Shin and ADLINK Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between An Shin Food Services and ADLINK Technology, you can compare the effects of market volatilities on An Shin and ADLINK Technology 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 An Shin with a short position of ADLINK Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Shin and ADLINK Technology.
Diversification Opportunities for An Shin and ADLINK Technology
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 1259 and ADLINK is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding An Shin Food Services and ADLINK Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADLINK Technology and An Shin 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 An Shin Food Services are associated (or correlated) with ADLINK Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADLINK Technology has no effect on the direction of An Shin i.e., An Shin and ADLINK Technology go up and down completely randomly.
Pair Corralation between An Shin and ADLINK Technology
Assuming the 90 days trading horizon An Shin is expected to generate 4.33 times less return on investment than ADLINK Technology. But when comparing it to its historical volatility, An Shin Food Services is 3.22 times less risky than ADLINK Technology. It trades about 0.18 of its potential returns per unit of risk. ADLINK Technology is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 7,550 in ADLINK Technology on November 28, 2024 and sell it today you would earn a total of 890.00 from holding ADLINK Technology or generate 11.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
An Shin Food Services vs. ADLINK Technology
Performance |
| Timeline |
| An Shin Food |
| ADLINK Technology |
An Shin and ADLINK Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Shin and ADLINK Technology
The main advantage of trading using opposite An Shin and ADLINK Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Shin position performs unexpectedly, ADLINK Technology 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 ADLINK Technology will offset losses from the drop in ADLINK Technology's long position.| An Shin vs. International CSRC Investment | An Shin vs. Onyx Healthcare | An Shin vs. Taiwan Speciality Chemicals | An Shin vs. China Airlines |
| ADLINK Technology vs. Shin Kong Financial | ADLINK Technology vs. Taishin Financial Holding | ADLINK Technology vs. Shinkong Insurance Co | ADLINK Technology vs. Oceanic Beverages Co |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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