Correlation Between Advanced Ceramic and Tainet Communication
Can any of the company-specific risk be diversified away by investing in both Advanced Ceramic and Tainet Communication 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 Tainet Communication 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 Tainet Communication System, you can compare the effects of market volatilities on Advanced Ceramic and Tainet Communication 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 Tainet Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Ceramic and Tainet Communication.
Diversification Opportunities for Advanced Ceramic and Tainet Communication
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Advanced and Tainet is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Ceramic X and Tainet Communication System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainet Communication 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 Tainet Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainet Communication has no effect on the direction of Advanced Ceramic i.e., Advanced Ceramic and Tainet Communication go up and down completely randomly.
Pair Corralation between Advanced Ceramic and Tainet Communication
Assuming the 90 days trading horizon Advanced Ceramic X is expected to generate 0.93 times more return on investment than Tainet Communication. However, Advanced Ceramic X is 1.07 times less risky than Tainet Communication. It trades about 0.06 of its potential returns per unit of risk. Tainet Communication System is currently generating about -0.13 per unit of risk. If you would invest 16,450 in Advanced Ceramic X on August 29, 2024 and sell it today you would earn a total of 500.00 from holding Advanced Ceramic X or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Ceramic X vs. Tainet Communication System
Performance |
| Timeline |
| Advanced Ceramic X |
| Tainet Communication |
Advanced Ceramic and Tainet Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Ceramic and Tainet Communication
The main advantage of trading using opposite Advanced Ceramic and Tainet Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Ceramic position performs unexpectedly, Tainet Communication 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 Tainet Communication will offset losses from the drop in Tainet Communication's 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 |
| Tainet Communication vs. Accton Technology Corp | Tainet Communication vs. Wistron NeWeb Corp | Tainet Communication vs. Arcadyan Technology Corp | Tainet Communication vs. Sercomm 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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