Correlation Between Adata Technology and Channel Well
Can any of the company-specific risk be diversified away by investing in both Adata Technology and Channel Well 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 Channel Well 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 Channel Well Technology, you can compare the effects of market volatilities on Adata Technology and Channel Well 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 Channel Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adata Technology and Channel Well.
Diversification Opportunities for Adata Technology and Channel Well
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Adata and Channel is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Adata Technology Co and Channel Well Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Channel Well Technology 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 Channel Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Channel Well Technology has no effect on the direction of Adata Technology i.e., Adata Technology and Channel Well go up and down completely randomly.
Pair Corralation between Adata Technology and Channel Well
Assuming the 90 days trading horizon Adata Technology Co is expected to under-perform the Channel Well. But the stock apears to be less risky and, when comparing its historical volatility, Adata Technology Co is 1.95 times less risky than Channel Well. The stock trades about -0.19 of its potential returns per unit of risk. The Channel Well Technology is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 7,020 in Channel Well Technology on October 12, 2024 and sell it today you would earn a total of 960.00 from holding Channel Well Technology or generate 13.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Adata Technology Co vs. Channel Well Technology
Performance |
| Timeline |
| Adata Technology |
| Channel Well Technology |
Adata Technology and Channel Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adata Technology and Channel Well
The main advantage of trading using opposite Adata Technology and Channel Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adata Technology position performs unexpectedly, Channel Well 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 Channel Well will offset losses from the drop in Channel Well's long position.| Adata Technology vs. Transcend Information | Adata Technology vs. Phison Electronics | Adata Technology vs. Nanya Technology Corp | Adata Technology vs. Innolux Corp |
| Channel Well vs. Topco Scientific Co | Channel Well vs. Asia Vital Components | Channel Well vs. Ardentec | Channel Well vs. Adata Technology 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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