Correlation Between Adata Technology and Fortune Information
Can any of the company-specific risk be diversified away by investing in both Adata Technology and Fortune Information 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 Fortune Information 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 Fortune Information Systems, you can compare the effects of market volatilities on Adata Technology and Fortune Information 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 Fortune Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adata Technology and Fortune Information.
Diversification Opportunities for Adata Technology and Fortune Information
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Adata and Fortune is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Adata Technology Co and Fortune Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Information 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 Fortune Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Information has no effect on the direction of Adata Technology i.e., Adata Technology and Fortune Information go up and down completely randomly.
Pair Corralation between Adata Technology and Fortune Information
Assuming the 90 days trading horizon Adata Technology Co is expected to under-perform the Fortune Information. But the stock apears to be less risky and, when comparing its historical volatility, Adata Technology Co is 1.22 times less risky than Fortune Information. The stock trades about -0.09 of its potential returns per unit of risk. The Fortune Information Systems is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 2,710 in Fortune Information Systems on September 3, 2024 and sell it today you would lose (545.00) from holding Fortune Information Systems or give up 20.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adata Technology Co vs. Fortune Information Systems
Performance |
| Timeline |
| Adata Technology |
| Fortune Information |
Adata Technology and Fortune Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adata Technology and Fortune Information
The main advantage of trading using opposite Adata Technology and Fortune Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adata Technology position performs unexpectedly, Fortune Information 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 Fortune Information will offset losses from the drop in Fortune Information's long position.| Adata Technology vs. Sitronix Technology Corp | Adata Technology vs. Kinsus Interconnect Technology | Adata Technology vs. WiseChip Semiconductor | Adata Technology vs. Novatek Microelectronics Corp |
| Fortune Information vs. Taiwan Semiconductor Manufacturing | Fortune Information vs. Yang Ming Marine | Fortune Information vs. ASE Industrial Holding | Fortune Information vs. AU Optronics |
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 Correlations module to find global opportunities by holding instruments from different markets.
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