Correlation Between Adata Technology and Shan Loong
Can any of the company-specific risk be diversified away by investing in both Adata Technology and Shan Loong 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 Shan Loong 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 Shan Loong Transportation Co, you can compare the effects of market volatilities on Adata Technology and Shan Loong 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 Shan Loong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adata Technology and Shan Loong.
Diversification Opportunities for Adata Technology and Shan Loong
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adata and Shan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Adata Technology Co and Shan Loong Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shan Loong Transport 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 Shan Loong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shan Loong Transport has no effect on the direction of Adata Technology i.e., Adata Technology and Shan Loong go up and down completely randomly.
Pair Corralation between Adata Technology and Shan Loong
Assuming the 90 days trading horizon Adata Technology Co is expected to under-perform the Shan Loong. In addition to that, Adata Technology is 1.51 times more volatile than Shan Loong Transportation Co. It trades about -0.1 of its total potential returns per unit of risk. Shan Loong Transportation Co is currently generating about -0.15 per unit of volatility. If you would invest 2,575 in Shan Loong Transportation Co on September 1, 2024 and sell it today you would lose (570.00) from holding Shan Loong Transportation Co or give up 22.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adata Technology Co vs. Shan Loong Transportation Co
Performance |
| Timeline |
| Adata Technology |
| Shan Loong Transport |
Adata Technology and Shan Loong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adata Technology and Shan Loong
The main advantage of trading using opposite Adata Technology and Shan Loong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adata Technology position performs unexpectedly, Shan Loong 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 Shan Loong will offset losses from the drop in Shan Loong's long position.| Adata Technology vs. Transcend Information | Adata Technology vs. Phison Electronics | Adata Technology vs. Nanya Technology Corp | Adata Technology vs. Innolux Corp |
| Shan Loong vs. Chaintech Technology Corp | Shan Loong vs. AVerMedia Technologies | Shan Loong vs. Avision | Shan Loong vs. Clevo Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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