Correlation Between Adata Technology and Mercuries Data
Can any of the company-specific risk be diversified away by investing in both Adata Technology and Mercuries Data 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 Mercuries Data 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 Mercuries Data Systems, you can compare the effects of market volatilities on Adata Technology and Mercuries Data 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 Mercuries Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adata Technology and Mercuries Data.
Diversification Opportunities for Adata Technology and Mercuries Data
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Adata and Mercuries is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Adata Technology Co and Mercuries Data Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercuries Data Systems 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 Mercuries Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercuries Data Systems has no effect on the direction of Adata Technology i.e., Adata Technology and Mercuries Data go up and down completely randomly.
Pair Corralation between Adata Technology and Mercuries Data
Assuming the 90 days trading horizon Adata Technology is expected to generate 2.52 times less return on investment than Mercuries Data. But when comparing it to its historical volatility, Adata Technology Co is 1.35 times less risky than Mercuries Data. It trades about 0.03 of its potential returns per unit of risk. Mercuries Data Systems is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,205 in Mercuries Data Systems on October 23, 2024 and sell it today you would earn a total of 1,330 from holding Mercuries Data Systems or generate 110.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adata Technology Co vs. Mercuries Data Systems
Performance |
| Timeline |
| Adata Technology |
| Mercuries Data Systems |
Adata Technology and Mercuries Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adata Technology and Mercuries Data
The main advantage of trading using opposite Adata Technology and Mercuries Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adata Technology position performs unexpectedly, Mercuries Data 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 Mercuries Data will offset losses from the drop in Mercuries Data's long position.| Adata Technology vs. Transcend Information | Adata Technology vs. Phison Electronics | Adata Technology vs. Nanya Technology Corp | Adata Technology vs. Innolux Corp |
| Mercuries Data vs. Ichia Technologies | Mercuries Data vs. Gigastorage Corp | Mercuries Data vs. Ability Enterprise Co | Mercuries Data vs. AVerMedia Technologies |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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