Correlation Between Emerging Display and Ardentec
Can any of the company-specific risk be diversified away by investing in both Emerging Display 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 Emerging Display and Ardentec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Display Technologies and Ardentec, you can compare the effects of market volatilities on Emerging Display 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 Emerging Display with a short position of Ardentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Display and Ardentec.
Diversification Opportunities for Emerging Display and Ardentec
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Emerging and Ardentec is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Display Technologies and Ardentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardentec and Emerging Display 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 Emerging Display Technologies 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 Emerging Display i.e., Emerging Display and Ardentec go up and down completely randomly.
Pair Corralation between Emerging Display and Ardentec
Assuming the 90 days trading horizon Emerging Display Technologies is expected to under-perform the Ardentec. But the stock apears to be less risky and, when comparing its historical volatility, Emerging Display Technologies is 2.05 times less risky than Ardentec. The stock trades about -0.05 of its potential returns per unit of risk. The Ardentec is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 5,210 in Ardentec on October 29, 2024 and sell it today you would earn a total of 1,680 from holding Ardentec or generate 32.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Display Technologies vs. Ardentec
Performance |
| Timeline |
| Emerging Display Tec |
| Ardentec |
Emerging Display and Ardentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Display and Ardentec
The main advantage of trading using opposite Emerging Display and Ardentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Display 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.| Emerging Display vs. Unimicron Technology Corp | Emerging Display vs. Kinsus Interconnect Technology | Emerging Display vs. Novatek Microelectronics Corp | Emerging Display vs. Delta Electronics |
| Ardentec vs. Sino American Silicon Products | Ardentec vs. Powertech Technology | Ardentec vs. Formosa Sumco Technology | Ardentec vs. Radiant Opto Electronics 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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