Correlation Between ADTechnology CoLtd and Solution Advanced
Can any of the company-specific risk be diversified away by investing in both ADTechnology CoLtd and Solution Advanced 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 ADTechnology CoLtd and Solution Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADTechnology CoLtd and Solution Advanced Technology, you can compare the effects of market volatilities on ADTechnology CoLtd and Solution Advanced 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 ADTechnology CoLtd with a short position of Solution Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADTechnology CoLtd and Solution Advanced.
Diversification Opportunities for ADTechnology CoLtd and Solution Advanced
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ADTechnology and Solution is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ADTechnology CoLtd and Solution Advanced Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solution Advanced and ADTechnology CoLtd 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 ADTechnology CoLtd are associated (or correlated) with Solution Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solution Advanced has no effect on the direction of ADTechnology CoLtd i.e., ADTechnology CoLtd and Solution Advanced go up and down completely randomly.
Pair Corralation between ADTechnology CoLtd and Solution Advanced
Assuming the 90 days trading horizon ADTechnology CoLtd is expected to generate 1.42 times more return on investment than Solution Advanced. However, ADTechnology CoLtd is 1.42 times more volatile than Solution Advanced Technology. It trades about 0.2 of its potential returns per unit of risk. Solution Advanced Technology is currently generating about 0.23 per unit of risk. If you would invest 1,628,000 in ADTechnology CoLtd on November 1, 2024 and sell it today you would earn a total of 269,000 from holding ADTechnology CoLtd or generate 16.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADTechnology CoLtd vs. Solution Advanced Technology
Performance |
| Timeline |
| ADTechnology CoLtd |
| Solution Advanced |
ADTechnology CoLtd and Solution Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADTechnology CoLtd and Solution Advanced
The main advantage of trading using opposite ADTechnology CoLtd and Solution Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADTechnology CoLtd position performs unexpectedly, Solution Advanced 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 Solution Advanced will offset losses from the drop in Solution Advanced's long position.| ADTechnology CoLtd vs. Samsung Electronics Co | ADTechnology CoLtd vs. Samsung Electronics Co | ADTechnology CoLtd vs. SK Hynix | ADTechnology CoLtd vs. HMM Co |
| Solution Advanced vs. Ssangyong Information Communication | Solution Advanced vs. Nice Information Telecommunication | Solution Advanced vs. CG Hi Tech | Solution Advanced vs. Sangsin Energy Display |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |