Correlation Between Ardentec and Asia Vital
Can any of the company-specific risk be diversified away by investing in both Ardentec and Asia Vital 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 Ardentec and Asia Vital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ardentec and Asia Vital Components, you can compare the effects of market volatilities on Ardentec and Asia Vital 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 Ardentec with a short position of Asia Vital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ardentec and Asia Vital.
Diversification Opportunities for Ardentec and Asia Vital
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ardentec and Asia is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ardentec and Asia Vital Components in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Vital Components and Ardentec 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 Ardentec are associated (or correlated) with Asia Vital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Vital Components has no effect on the direction of Ardentec i.e., Ardentec and Asia Vital go up and down completely randomly.
Pair Corralation between Ardentec and Asia Vital
Assuming the 90 days trading horizon Ardentec is expected to generate 3.33 times less return on investment than Asia Vital. But when comparing it to its historical volatility, Ardentec is 1.76 times less risky than Asia Vital. It trades about 0.03 of its potential returns per unit of risk. Asia Vital Components is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 34,500 in Asia Vital Components on October 28, 2024 and sell it today you would earn a total of 23,400 from holding Asia Vital Components or generate 67.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ardentec vs. Asia Vital Components
Performance |
| Timeline |
| Ardentec |
| Asia Vital Components |
Ardentec and Asia Vital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ardentec and Asia Vital
The main advantage of trading using opposite Ardentec and Asia Vital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ardentec position performs unexpectedly, Asia Vital 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 Asia Vital will offset losses from the drop in Asia Vital's long position.| Ardentec vs. Sports Gear Co | Ardentec vs. Emerging Display Technologies | Ardentec vs. TWOWAY Communications | Ardentec vs. U Ming Marine Transport |
| Asia Vital vs. Unimicron Technology Corp | Asia Vital vs. Asia Optical Co | Asia Vital vs. Kinsus Interconnect Technology | Asia Vital vs. Novatek Microelectronics Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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