Correlation Between Asia Vital and Ardentec
Can any of the company-specific risk be diversified away by investing in both Asia Vital 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 Asia Vital and Ardentec 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 Ardentec, you can compare the effects of market volatilities on Asia Vital 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 Asia Vital with a short position of Ardentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Vital and Ardentec.
Diversification Opportunities for Asia Vital and Ardentec
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asia and Ardentec is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Asia Vital Components and Ardentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardentec 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 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 Asia Vital i.e., Asia Vital and Ardentec go up and down completely randomly.
Pair Corralation between Asia Vital and Ardentec
Assuming the 90 days trading horizon Asia Vital Components is expected to under-perform the Ardentec. But the stock apears to be less risky and, when comparing its historical volatility, Asia Vital Components is 1.08 times less risky than Ardentec. The stock trades about -0.12 of its potential returns per unit of risk. The Ardentec is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 5,420 in Ardentec on October 28, 2024 and sell it today you would earn a total of 1,470 from holding Ardentec or generate 27.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Vital Components vs. Ardentec
Performance |
| Timeline |
| Asia Vital Components |
| Ardentec |
Asia Vital and Ardentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Vital and Ardentec
The main advantage of trading using opposite Asia Vital and Ardentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Vital 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.| Asia Vital vs. Unimicron Technology Corp | Asia Vital vs. Asia Optical Co | Asia Vital vs. Kinsus Interconnect Technology | Asia Vital vs. Novatek Microelectronics Corp |
| Ardentec vs. Sports Gear Co | Ardentec vs. Emerging Display Technologies | Ardentec vs. TWOWAY Communications | Ardentec vs. U Ming Marine Transport |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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