Correlation Between Adata Technology and Evergreen International
Can any of the company-specific risk be diversified away by investing in both Adata Technology and Evergreen 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 Adata Technology and Evergreen International 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 Evergreen International Storage, you can compare the effects of market volatilities on Adata Technology and Evergreen 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 Adata Technology with a short position of Evergreen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adata Technology and Evergreen International.
Diversification Opportunities for Adata Technology and Evergreen International
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Adata and Evergreen is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Adata Technology Co and Evergreen International Storag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergreen International 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 Evergreen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergreen International has no effect on the direction of Adata Technology i.e., Adata Technology and Evergreen International go up and down completely randomly.
Pair Corralation between Adata Technology and Evergreen International
Assuming the 90 days trading horizon Adata Technology Co is expected to generate 1.09 times more return on investment than Evergreen International. However, Adata Technology is 1.09 times more volatile than Evergreen International Storage. It trades about 0.13 of its potential returns per unit of risk. Evergreen International Storage is currently generating about 0.04 per unit of risk. If you would invest 8,450 in Adata Technology Co on August 30, 2024 and sell it today you would earn a total of 300.00 from holding Adata Technology Co or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adata Technology Co vs. Evergreen International Storag
Performance |
| Timeline |
| Adata Technology |
| Evergreen International |
Adata Technology and Evergreen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adata Technology and Evergreen International
The main advantage of trading using opposite Adata Technology and Evergreen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adata Technology position performs unexpectedly, Evergreen 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 Evergreen International will offset losses from the drop in Evergreen International's long position.| Adata Technology vs. Transcend Information | Adata Technology vs. Phison Electronics | Adata Technology vs. Nanya Technology Corp | Adata Technology vs. Innolux Corp |
| Evergreen International vs. Yulon Motor Co | Evergreen International vs. Far Eastern Department | Evergreen International vs. China Steel Corp | Evergreen International vs. Chang Hwa Commercial |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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