Correlation Between Adata Technology and Shinkong Synthetic
Can any of the company-specific risk be diversified away by investing in both Adata Technology and Shinkong Synthetic 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 Adata Technology and Shinkong Synthetic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adata Technology Co and Shinkong Synthetic Fiber, you can compare the effects of market volatilities on Adata Technology and Shinkong Synthetic 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 Adata Technology with a short position of Shinkong Synthetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adata Technology and Shinkong Synthetic.
Diversification Opportunities for Adata Technology and Shinkong Synthetic
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adata and Shinkong is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Adata Technology Co and Shinkong Synthetic Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Synthetic Fiber and Adata Technology 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 Adata Technology Co are associated (or correlated) with Shinkong Synthetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinkong Synthetic Fiber has no effect on the direction of Adata Technology i.e., Adata Technology and Shinkong Synthetic go up and down completely randomly.
Pair Corralation between Adata Technology and Shinkong Synthetic
Assuming the 90 days trading horizon Adata Technology is expected to generate 2.27 times less return on investment than Shinkong Synthetic. In addition to that, Adata Technology is 1.34 times more volatile than Shinkong Synthetic Fiber. It trades about 0.05 of its total potential returns per unit of risk. Shinkong Synthetic Fiber is currently generating about 0.16 per unit of volatility. If you would invest 1,555 in Shinkong Synthetic Fiber on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Shinkong Synthetic Fiber or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adata Technology Co vs. Shinkong Synthetic Fiber
Performance |
| Timeline |
| Adata Technology |
| Shinkong Synthetic Fiber |
Adata Technology and Shinkong Synthetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adata Technology and Shinkong Synthetic
The main advantage of trading using opposite Adata Technology and Shinkong Synthetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adata Technology position performs unexpectedly, Shinkong Synthetic 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 Shinkong Synthetic will offset losses from the drop in Shinkong Synthetic's long position.| Adata Technology vs. Taiwan Semiconductor Manufacturing | Adata Technology vs. MediaTek | Adata Technology vs. United Microelectronics | Adata Technology vs. Novatek Microelectronics Corp |
| Shinkong Synthetic vs. Tainan Spinning Co | Shinkong Synthetic vs. Lealea Enterprise Co | Shinkong Synthetic vs. China Petrochemical Development | Shinkong Synthetic vs. Taiwan Styrene Monomer |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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