Correlation Between Joinsoon Electronics and Advantech
Can any of the company-specific risk be diversified away by investing in both Joinsoon Electronics 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 Joinsoon Electronics and Advantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Joinsoon Electronics MFG and Advantech Co, you can compare the effects of market volatilities on Joinsoon Electronics 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 Joinsoon Electronics with a short position of Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joinsoon Electronics and Advantech.
Diversification Opportunities for Joinsoon Electronics and Advantech
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Joinsoon and Advantech is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Joinsoon Electronics MFG and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech and Joinsoon Electronics 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 Joinsoon Electronics MFG 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 Joinsoon Electronics i.e., Joinsoon Electronics and Advantech go up and down completely randomly.
Pair Corralation between Joinsoon Electronics and Advantech
Assuming the 90 days trading horizon Joinsoon Electronics MFG is expected to under-perform the Advantech. But the stock apears to be less risky and, when comparing its historical volatility, Joinsoon Electronics MFG is 1.14 times less risky than Advantech. The stock trades about -0.23 of its potential returns per unit of risk. The Advantech Co is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 31,800 in Advantech Co on August 25, 2024 and sell it today you would earn a total of 3,100 from holding Advantech Co or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Joinsoon Electronics MFG vs. Advantech Co
Performance |
| Timeline |
| Joinsoon Electronics MFG |
| Advantech |
Joinsoon Electronics and Advantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Joinsoon Electronics and Advantech
The main advantage of trading using opposite Joinsoon Electronics and Advantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Joinsoon Electronics 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.| Joinsoon Electronics vs. Feng Hsin Steel | Joinsoon Electronics vs. First Insurance Co | Joinsoon Electronics vs. Taiwan Cooperative Financial | Joinsoon Electronics vs. Union Bank of |
| Advantech vs. Novatek Microelectronics Corp | Advantech vs. Quanta Computer | Advantech vs. United Microelectronics |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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