Correlation Between Advanced Ceramic and Senao Networks
Can any of the company-specific risk be diversified away by investing in both Advanced Ceramic and Senao Networks 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 Advanced Ceramic and Senao Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Ceramic X and Senao Networks, you can compare the effects of market volatilities on Advanced Ceramic and Senao Networks 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 Advanced Ceramic with a short position of Senao Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Ceramic and Senao Networks.
Diversification Opportunities for Advanced Ceramic and Senao Networks
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advanced and Senao is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Ceramic X and Senao Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senao Networks and Advanced Ceramic 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 Advanced Ceramic X are associated (or correlated) with Senao Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senao Networks has no effect on the direction of Advanced Ceramic i.e., Advanced Ceramic and Senao Networks go up and down completely randomly.
Pair Corralation between Advanced Ceramic and Senao Networks
Assuming the 90 days trading horizon Advanced Ceramic X is expected to under-perform the Senao Networks. But the stock apears to be less risky and, when comparing its historical volatility, Advanced Ceramic X is 1.4 times less risky than Senao Networks. The stock trades about -0.04 of its potential returns per unit of risk. The Senao Networks is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 17,300 in Senao Networks on August 29, 2024 and sell it today you would earn a total of 3,550 from holding Senao Networks or generate 20.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Ceramic X vs. Senao Networks
Performance |
| Timeline |
| Advanced Ceramic X |
| Senao Networks |
Advanced Ceramic and Senao Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Ceramic and Senao Networks
The main advantage of trading using opposite Advanced Ceramic and Senao Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Ceramic position performs unexpectedly, Senao Networks 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 Senao Networks will offset losses from the drop in Senao Networks' long position.| Advanced Ceramic vs. Accton Technology Corp | Advanced Ceramic vs. Wistron NeWeb Corp | Advanced Ceramic vs. Arcadyan Technology Corp | Advanced Ceramic vs. Sercomm Corp |
| Senao Networks vs. Group Up Industrial | Senao Networks vs. Wiwynn Corp | Senao Networks vs. Senao International Co | Senao Networks vs. San Neng Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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