Correlation Between Advantech and Integrated Service
Can any of the company-specific risk be diversified away by investing in both Advantech and Integrated Service 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 Advantech and Integrated Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantech Co and Integrated Service Technology, you can compare the effects of market volatilities on Advantech and Integrated Service 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 Advantech with a short position of Integrated Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantech and Integrated Service.
Diversification Opportunities for Advantech and Integrated Service
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advantech and Integrated is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Advantech Co and Integrated Service Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Service and Advantech 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 Advantech Co are associated (or correlated) with Integrated Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Service has no effect on the direction of Advantech i.e., Advantech and Integrated Service go up and down completely randomly.
Pair Corralation between Advantech and Integrated Service
Assuming the 90 days trading horizon Advantech Co is expected to generate 0.61 times more return on investment than Integrated Service. However, Advantech Co is 1.64 times less risky than Integrated Service. It trades about -0.03 of its potential returns per unit of risk. Integrated Service Technology is currently generating about -0.04 per unit of risk. If you would invest 34,800 in Advantech Co on September 3, 2024 and sell it today you would lose (1,250) from holding Advantech Co or give up 3.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advantech Co vs. Integrated Service Technology
Performance |
| Timeline |
| Advantech |
| Integrated Service |
Advantech and Integrated Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantech and Integrated Service
The main advantage of trading using opposite Advantech and Integrated Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantech position performs unexpectedly, Integrated Service 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 Integrated Service will offset losses from the drop in Integrated Service's long position.| Advantech vs. Taiwan Semiconductor Manufacturing | Advantech vs. Yang Ming Marine | Advantech vs. ASE Industrial Holding | Advantech vs. AU Optronics |
| Integrated Service vs. Sitronix Technology Corp | Integrated Service vs. Kinsus Interconnect Technology | Integrated Service vs. WiseChip Semiconductor | Integrated Service 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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