Correlation Between Advantech and Aten International
Can any of the company-specific risk be diversified away by investing in both Advantech and Aten 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 Aten 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 Aten International Co, you can compare the effects of market volatilities on Advantech and Aten 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 Aten International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantech and Aten International.
Diversification Opportunities for Advantech and Aten International
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Advantech and Aten is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Advantech Co and Aten International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aten 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 Aten International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aten International has no effect on the direction of Advantech i.e., Advantech and Aten International go up and down completely randomly.
Pair Corralation between Advantech and Aten International
Assuming the 90 days trading horizon Advantech Co is expected to generate 3.83 times more return on investment than Aten International. However, Advantech is 3.83 times more volatile than Aten International Co. It trades about 0.14 of its potential returns per unit of risk. Aten International Co is currently generating about -0.05 per unit of risk. If you would invest 32,150 in Advantech Co on August 30, 2024 and sell it today you would earn a total of 2,500 from holding Advantech Co or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advantech Co vs. Aten International Co
Performance |
| Timeline |
| Advantech |
| Aten International |
Advantech and Aten International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantech and Aten International
The main advantage of trading using opposite Advantech and Aten International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantech position performs unexpectedly, Aten 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 Aten International will offset losses from the drop in Aten International's long position.| Advantech vs. Delta Electronics | Advantech vs. Quanta Computer | Advantech vs. Realtek Semiconductor Corp | Advantech vs. President Chain Store |
| Aten International vs. Flytech Technology Co | Aten International vs. Topco Scientific Co | Aten International vs. Chicony Electronics Co | Aten International vs. Advantech 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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