Correlation Between Dynapack International and Advanced International
Can any of the company-specific risk be diversified away by investing in both Dynapack International and Advanced International 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 Dynapack International and Advanced International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynapack International Technology and Advanced International Multitech, you can compare the effects of market volatilities on Dynapack International and Advanced International 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 Dynapack International with a short position of Advanced International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynapack International and Advanced International.
Diversification Opportunities for Dynapack International and Advanced International
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dynapack and Advanced is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dynapack International Technol and Advanced International Multite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced International and Dynapack International 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 Dynapack International Technology are associated (or correlated) with Advanced International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced International has no effect on the direction of Dynapack International i.e., Dynapack International and Advanced International go up and down completely randomly.
Pair Corralation between Dynapack International and Advanced International
Assuming the 90 days trading horizon Dynapack International Technology is expected to generate 7.97 times more return on investment than Advanced International. However, Dynapack International is 7.97 times more volatile than Advanced International Multitech. It trades about 0.24 of its potential returns per unit of risk. Advanced International Multitech is currently generating about -0.33 per unit of risk. If you would invest 10,400 in Dynapack International Technology on August 25, 2024 and sell it today you would earn a total of 5,100 from holding Dynapack International Technology or generate 49.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynapack International Technol vs. Advanced International Multite
Performance |
| Timeline |
| Dynapack International |
| Advanced International |
Dynapack International and Advanced International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynapack International and Advanced International
The main advantage of trading using opposite Dynapack International and Advanced International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynapack International position performs unexpectedly, Advanced International 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 Advanced International will offset losses from the drop in Advanced International's long position.| Dynapack International vs. Walsin Lihwa Corp | Dynapack International vs. Simplo Technology Co | Dynapack International vs. Ta Ya Electric | Dynapack International vs. Hiwin Mikrosystem Corp |
| Advanced International vs. Giant Manufacturing Co | Advanced International vs. Johnson Health Tech | Advanced International vs. Sports Gear Co | Advanced International vs. Power Wind Health |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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