Correlation Between Ardentec and Adata Technology
Can any of the company-specific risk be diversified away by investing in both Ardentec and Adata Technology 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 Adata Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ardentec and Adata Technology Co, you can compare the effects of market volatilities on Ardentec and Adata Technology 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 Adata Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ardentec and Adata Technology.
Diversification Opportunities for Ardentec and Adata Technology
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ardentec and Adata is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ardentec and Adata Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adata Technology 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 Adata Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adata Technology has no effect on the direction of Ardentec i.e., Ardentec and Adata Technology go up and down completely randomly.
Pair Corralation between Ardentec and Adata Technology
Assuming the 90 days trading horizon Ardentec is expected to generate 1.6 times more return on investment than Adata Technology. However, Ardentec is 1.6 times more volatile than Adata Technology Co. It trades about 0.35 of its potential returns per unit of risk. Adata Technology Co is currently generating about -0.05 per unit of risk. If you would invest 5,420 in Ardentec on October 28, 2024 and sell it today you would earn a total of 1,470 from holding Ardentec or generate 27.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ardentec vs. Adata Technology Co
Performance |
| Timeline |
| Ardentec |
| Adata Technology |
Ardentec and Adata Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ardentec and Adata Technology
The main advantage of trading using opposite Ardentec and Adata Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ardentec position performs unexpectedly, Adata Technology 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 Adata Technology will offset losses from the drop in Adata Technology's long position.| Ardentec vs. Sports Gear Co | Ardentec vs. Emerging Display Technologies | Ardentec vs. TWOWAY Communications | Ardentec vs. U Ming Marine Transport |
| Adata Technology vs. WIN Semiconductors | Adata Technology vs. Visual Photonics Epitaxy | Adata Technology vs. GlobalWafers Co | Adata Technology vs. Unimicron Technology 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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