Correlation Between Advantech and Chenbro Micom
Can any of the company-specific risk be diversified away by investing in both Advantech and Chenbro Micom 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 Chenbro Micom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantech Co and Chenbro Micom Co, you can compare the effects of market volatilities on Advantech and Chenbro Micom 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 Chenbro Micom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantech and Chenbro Micom.
Diversification Opportunities for Advantech and Chenbro Micom
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Advantech and Chenbro is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Advantech Co and Chenbro Micom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chenbro Micom 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 Chenbro Micom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chenbro Micom has no effect on the direction of Advantech i.e., Advantech and Chenbro Micom go up and down completely randomly.
Pair Corralation between Advantech and Chenbro Micom
Assuming the 90 days trading horizon Advantech Co is expected to generate 0.56 times more return on investment than Chenbro Micom. However, Advantech Co is 1.8 times less risky than Chenbro Micom. It trades about 0.15 of its potential returns per unit of risk. Chenbro Micom Co is currently generating about 0.04 per unit of risk. If you would invest 32,000 in Advantech Co on September 1, 2024 and sell it today you would earn a total of 1,550 from holding Advantech Co or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Advantech Co vs. Chenbro Micom Co
Performance |
| Timeline |
| Advantech |
| Chenbro Micom |
Advantech and Chenbro Micom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantech and Chenbro Micom
The main advantage of trading using opposite Advantech and Chenbro Micom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantech position performs unexpectedly, Chenbro Micom 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 Chenbro Micom will offset losses from the drop in Chenbro Micom's long position.| Advantech vs. Delta Electronics | Advantech vs. Quanta Computer | Advantech vs. Realtek Semiconductor Corp | Advantech vs. President Chain Store |
| Chenbro Micom vs. Getac Technology Corp | Chenbro Micom vs. ASRock Inc | Chenbro Micom vs. Elite Material Co | Chenbro Micom vs. Topco Scientific 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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