Correlation Between Advancetek Enterprise and Shinkong Textile
Can any of the company-specific risk be diversified away by investing in both Advancetek Enterprise and Shinkong Textile 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 Advancetek Enterprise and Shinkong Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advancetek Enterprise Co and Shinkong Textile Co, you can compare the effects of market volatilities on Advancetek Enterprise and Shinkong Textile 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 Advancetek Enterprise with a short position of Shinkong Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advancetek Enterprise and Shinkong Textile.
Diversification Opportunities for Advancetek Enterprise and Shinkong Textile
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advancetek and Shinkong is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Advancetek Enterprise Co and Shinkong Textile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Textile and Advancetek Enterprise 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 Advancetek Enterprise Co are associated (or correlated) with Shinkong Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinkong Textile has no effect on the direction of Advancetek Enterprise i.e., Advancetek Enterprise and Shinkong Textile go up and down completely randomly.
Pair Corralation between Advancetek Enterprise and Shinkong Textile
Assuming the 90 days trading horizon Advancetek Enterprise Co is expected to generate 2.36 times more return on investment than Shinkong Textile. However, Advancetek Enterprise is 2.36 times more volatile than Shinkong Textile Co. It trades about 0.32 of its potential returns per unit of risk. Shinkong Textile Co is currently generating about 0.0 per unit of risk. If you would invest 6,650 in Advancetek Enterprise Co on September 5, 2024 and sell it today you would earn a total of 1,520 from holding Advancetek Enterprise Co or generate 22.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advancetek Enterprise Co vs. Shinkong Textile Co
Performance |
| Timeline |
| Advancetek Enterprise |
| Shinkong Textile |
Advancetek Enterprise and Shinkong Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advancetek Enterprise and Shinkong Textile
The main advantage of trading using opposite Advancetek Enterprise and Shinkong Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advancetek Enterprise position performs unexpectedly, Shinkong Textile 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 Shinkong Textile will offset losses from the drop in Shinkong Textile's long position.| Advancetek Enterprise vs. Huaku Development Co | Advancetek Enterprise vs. Ruentex Development Co | Advancetek Enterprise vs. Taiwan Cement Corp | Advancetek Enterprise vs. Symtek Automation Asia |
| Shinkong Textile vs. Tainan Spinning Co | Shinkong Textile vs. Chia Her Industrial | Shinkong Textile vs. WiseChip Semiconductor | Shinkong Textile vs. Novatek Microelectronics Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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