Correlation Between New Advanced and StShine Optical
Can any of the company-specific risk be diversified away by investing in both New Advanced and StShine Optical 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 New Advanced and StShine Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Advanced Electronics and StShine Optical Co, you can compare the effects of market volatilities on New Advanced and StShine Optical 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 New Advanced with a short position of StShine Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Advanced and StShine Optical.
Diversification Opportunities for New Advanced and StShine Optical
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between New and StShine is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding New Advanced Electronics and StShine Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StShine Optical and New Advanced 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 New Advanced Electronics are associated (or correlated) with StShine Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StShine Optical has no effect on the direction of New Advanced i.e., New Advanced and StShine Optical go up and down completely randomly.
Pair Corralation between New Advanced and StShine Optical
Assuming the 90 days trading horizon New Advanced Electronics is expected to under-perform the StShine Optical. But the stock apears to be less risky and, when comparing its historical volatility, New Advanced Electronics is 1.03 times less risky than StShine Optical. The stock trades about -0.24 of its potential returns per unit of risk. The StShine Optical Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 21,350 in StShine Optical Co on August 26, 2024 and sell it today you would earn a total of 1,600 from holding StShine Optical Co or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Advanced Electronics vs. StShine Optical Co
Performance |
| Timeline |
| New Advanced Electronics |
| StShine Optical |
New Advanced and StShine Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Advanced and StShine Optical
The main advantage of trading using opposite New Advanced and StShine Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Advanced position performs unexpectedly, StShine Optical 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 StShine Optical will offset losses from the drop in StShine Optical's long position.| New Advanced vs. Advantech Co | New Advanced vs. IEI Integration Corp | New Advanced vs. Flytech Technology Co | New Advanced vs. ADLINK Technology |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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