Correlation Between Asia Vital and Adata Technology
Can any of the company-specific risk be diversified away by investing in both Asia Vital and Adata Technology 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 Asia Vital and Adata Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Vital Components and Adata Technology Co, you can compare the effects of market volatilities on Asia Vital and Adata Technology 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 Asia Vital with a short position of Adata Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Vital and Adata Technology.
Diversification Opportunities for Asia Vital and Adata Technology
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asia and Adata is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Asia Vital Components and Adata Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adata Technology and Asia Vital 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 Asia Vital Components are associated (or correlated) with Adata Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adata Technology has no effect on the direction of Asia Vital i.e., Asia Vital and Adata Technology go up and down completely randomly.
Pair Corralation between Asia Vital and Adata Technology
Assuming the 90 days trading horizon Asia Vital Components is expected to under-perform the Adata Technology. In addition to that, Asia Vital is 1.48 times more volatile than Adata Technology Co. It trades about -0.12 of its total potential returns per unit of risk. Adata Technology Co is currently generating about -0.05 per unit of volatility. If you would invest 7,930 in Adata Technology Co on October 28, 2024 and sell it today you would lose (230.00) from holding Adata Technology Co or give up 2.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Vital Components vs. Adata Technology Co
Performance |
| Timeline |
| Asia Vital Components |
| Adata Technology |
Asia Vital and Adata Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Vital and Adata Technology
The main advantage of trading using opposite Asia Vital and Adata Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Vital position performs unexpectedly, Adata Technology 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 Adata Technology will offset losses from the drop in Adata Technology's long position.| Asia Vital vs. Unimicron Technology Corp | Asia Vital vs. Asia Optical Co | Asia Vital vs. Kinsus Interconnect Technology | Asia Vital vs. Novatek Microelectronics Corp |
| Adata Technology vs. WIN Semiconductors | Adata Technology vs. Visual Photonics Epitaxy | Adata Technology vs. GlobalWafers Co | Adata Technology vs. Unimicron Technology 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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