Correlation Between Integrated Service and Advantech
Can any of the company-specific risk be diversified away by investing in both Integrated Service and Advantech 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 Integrated Service and Advantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Service Technology and Advantech Co, you can compare the effects of market volatilities on Integrated Service and Advantech 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 Integrated Service with a short position of Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Service and Advantech.
Diversification Opportunities for Integrated Service and Advantech
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Integrated and Advantech is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Service Technology and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech and Integrated Service 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 Integrated Service Technology are associated (or correlated) with Advantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantech has no effect on the direction of Integrated Service i.e., Integrated Service and Advantech go up and down completely randomly.
Pair Corralation between Integrated Service and Advantech
Assuming the 90 days trading horizon Integrated Service Technology is expected to under-perform the Advantech. In addition to that, Integrated Service is 1.64 times more volatile than Advantech Co. It trades about -0.04 of its total potential returns per unit of risk. Advantech Co is currently generating about -0.03 per unit of volatility. If you would invest 34,800 in Advantech Co on September 3, 2024 and sell it today you would lose (1,250) from holding Advantech Co or give up 3.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Service Technology vs. Advantech Co
Performance |
| Timeline |
| Integrated Service |
| Advantech |
Integrated Service and Advantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Service and Advantech
The main advantage of trading using opposite Integrated Service and Advantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Service position performs unexpectedly, Advantech 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 Advantech will offset losses from the drop in Advantech's long position.| Integrated Service vs. Sitronix Technology Corp | Integrated Service vs. Kinsus Interconnect Technology | Integrated Service vs. WiseChip Semiconductor | Integrated Service vs. Novatek Microelectronics Corp |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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