Correlation Between Bright Led and Amtran Technology
Can any of the company-specific risk be diversified away by investing in both Bright Led and Amtran 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 Bright Led and Amtran Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Led Electronics and Amtran Technology Co, you can compare the effects of market volatilities on Bright Led and Amtran 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 Bright Led with a short position of Amtran Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Led and Amtran Technology.
Diversification Opportunities for Bright Led and Amtran Technology
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bright and Amtran is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Bright Led Electronics and Amtran Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtran Technology and Bright Led 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 Bright Led Electronics are associated (or correlated) with Amtran Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtran Technology has no effect on the direction of Bright Led i.e., Bright Led and Amtran Technology go up and down completely randomly.
Pair Corralation between Bright Led and Amtran Technology
Assuming the 90 days trading horizon Bright Led is expected to generate 4.83 times less return on investment than Amtran Technology. But when comparing it to its historical volatility, Bright Led Electronics is 1.15 times less risky than Amtran Technology. It trades about 0.01 of its potential returns per unit of risk. Amtran Technology Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,145 in Amtran Technology Co on January 17, 2025 and sell it today you would earn a total of 210.00 from holding Amtran Technology Co or generate 18.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bright Led Electronics vs. Amtran Technology Co
Performance |
| Timeline |
| Bright Led Electronics |
| Amtran Technology |
Bright Led and Amtran Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Led and Amtran Technology
The main advantage of trading using opposite Bright Led and Amtran Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Led position performs unexpectedly, Amtran 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 Amtran Technology will offset losses from the drop in Amtran Technology's long position.| Bright Led vs. Hon Hai Precision | Bright Led vs. Taiwan Semiconductor Manufacturing | Bright Led vs. Pegatron Corp | Bright Led vs. Compal Electronics |
| Amtran Technology vs. Chernan Metal Industrial | Amtran Technology vs. Ton Yi Industrial | Amtran Technology vs. Carnival Industrial Corp | Amtran Technology vs. PChome Online |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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