Correlation Between Advantech and Datavan International
Can any of the company-specific risk be diversified away by investing in both Advantech and Datavan International 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 Datavan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantech Co and Datavan International, you can compare the effects of market volatilities on Advantech and Datavan International 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 Datavan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantech and Datavan International.
Diversification Opportunities for Advantech and Datavan International
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Advantech and Datavan is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Advantech Co and Datavan International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datavan International 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 Datavan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datavan International has no effect on the direction of Advantech i.e., Advantech and Datavan International go up and down completely randomly.
Pair Corralation between Advantech and Datavan International
Assuming the 90 days trading horizon Advantech Co is expected to generate 0.52 times more return on investment than Datavan International. However, Advantech Co is 1.94 times less risky than Datavan International. It trades about 0.02 of its potential returns per unit of risk. Datavan International is currently generating about 0.01 per unit of risk. If you would invest 32,673 in Advantech Co on August 30, 2024 and sell it today you would earn a total of 1,977 from holding Advantech Co or generate 6.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Advantech Co vs. Datavan International
Performance |
| Timeline |
| Advantech |
| Datavan International |
Advantech and Datavan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantech and Datavan International
The main advantage of trading using opposite Advantech and Datavan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantech position performs unexpectedly, Datavan International 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 Datavan International will offset losses from the drop in Datavan International's long position.| Advantech vs. Delta Electronics | Advantech vs. Quanta Computer | Advantech vs. Realtek Semiconductor Corp | Advantech vs. President Chain Store |
| Datavan International vs. Advantech Co | Datavan International vs. Asustek Computer | Datavan International vs. Lite On Technology Corp | Datavan International vs. Micro Star International 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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