Correlation Between Greatek Electronics and Ardentec
Can any of the company-specific risk be diversified away by investing in both Greatek Electronics and Ardentec 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 Greatek Electronics and Ardentec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatek Electronics and Ardentec, you can compare the effects of market volatilities on Greatek Electronics and Ardentec 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 Greatek Electronics with a short position of Ardentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatek Electronics and Ardentec.
Diversification Opportunities for Greatek Electronics and Ardentec
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Greatek and Ardentec is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Greatek Electronics and Ardentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardentec and Greatek Electronics 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 Greatek Electronics are associated (or correlated) with Ardentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardentec has no effect on the direction of Greatek Electronics i.e., Greatek Electronics and Ardentec go up and down completely randomly.
Pair Corralation between Greatek Electronics and Ardentec
Assuming the 90 days trading horizon Greatek Electronics is expected to generate 0.81 times more return on investment than Ardentec. However, Greatek Electronics is 1.24 times less risky than Ardentec. It trades about -0.05 of its potential returns per unit of risk. Ardentec is currently generating about -0.1 per unit of risk. If you would invest 6,300 in Greatek Electronics on September 1, 2024 and sell it today you would lose (630.00) from holding Greatek Electronics or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Greatek Electronics vs. Ardentec
Performance |
| Timeline |
| Greatek Electronics |
| Ardentec |
Greatek Electronics and Ardentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatek Electronics and Ardentec
The main advantage of trading using opposite Greatek Electronics and Ardentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatek Electronics position performs unexpectedly, Ardentec 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 Ardentec will offset losses from the drop in Ardentec's long position.| Greatek Electronics vs. King Yuan Electronics | Greatek Electronics vs. Powertech Technology | Greatek Electronics vs. Realtek Semiconductor Corp | Greatek Electronics vs. Elan Microelectronics Corp |
| Ardentec vs. AzureWave Technologies | Ardentec vs. Chicony Power Technology | Ardentec vs. Integrated Service Technology | Ardentec vs. Microelectronics Technology |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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