Correlation Between Novatek Microelectronics and ANJI Technology
Can any of the company-specific risk be diversified away by investing in both Novatek Microelectronics and ANJI 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 Novatek Microelectronics and ANJI Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novatek Microelectronics Corp and ANJI Technology Co, you can compare the effects of market volatilities on Novatek Microelectronics and ANJI 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 Novatek Microelectronics with a short position of ANJI Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novatek Microelectronics and ANJI Technology.
Diversification Opportunities for Novatek Microelectronics and ANJI Technology
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Novatek and ANJI is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Novatek Microelectronics Corp and ANJI Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANJI Technology and Novatek Microelectronics 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 Novatek Microelectronics Corp are associated (or correlated) with ANJI Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANJI Technology has no effect on the direction of Novatek Microelectronics i.e., Novatek Microelectronics and ANJI Technology go up and down completely randomly.
Pair Corralation between Novatek Microelectronics and ANJI Technology
Assuming the 90 days trading horizon Novatek Microelectronics Corp is expected to generate 0.82 times more return on investment than ANJI Technology. However, Novatek Microelectronics Corp is 1.21 times less risky than ANJI Technology. It trades about 0.05 of its potential returns per unit of risk. ANJI Technology Co is currently generating about -0.03 per unit of risk. If you would invest 38,150 in Novatek Microelectronics Corp on September 12, 2024 and sell it today you would earn a total of 10,700 from holding Novatek Microelectronics Corp or generate 28.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novatek Microelectronics Corp vs. ANJI Technology Co
Performance |
| Timeline |
| Novatek Microelectronics |
| ANJI Technology |
Novatek Microelectronics and ANJI Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novatek Microelectronics and ANJI Technology
The main advantage of trading using opposite Novatek Microelectronics and ANJI Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novatek Microelectronics position performs unexpectedly, ANJI 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 ANJI Technology will offset losses from the drop in ANJI Technology's long position.The idea behind Novatek Microelectronics Corp and ANJI Technology Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| ANJI Technology vs. AU Optronics | ANJI Technology vs. Innolux Corp | ANJI Technology vs. Ruentex Development Co | ANJI Technology vs. WiseChip Semiconductor |
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.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |