Correlation Between New Advanced and Advantech
Can any of the company-specific risk be diversified away by investing in both New Advanced 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 New Advanced and Advantech 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 Advantech Co, you can compare the effects of market volatilities on New Advanced 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 New Advanced with a short position of Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Advanced and Advantech.
Diversification Opportunities for New Advanced and Advantech
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between New and Advantech is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding New Advanced Electronics and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech 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 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 New Advanced i.e., New Advanced and Advantech go up and down completely randomly.
Pair Corralation between New Advanced and Advantech
Assuming the 90 days trading horizon New Advanced Electronics is expected to under-perform the Advantech. In addition to that, New Advanced is 1.22 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 0.02 per unit of volatility. If you would invest 32,233 in Advantech Co on August 25, 2024 and sell it today you would earn a total of 2,667 from holding Advantech Co or generate 8.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
New Advanced Electronics vs. Advantech Co
Performance |
| Timeline |
| New Advanced Electronics |
| Advantech |
New Advanced and Advantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Advanced and Advantech
The main advantage of trading using opposite New Advanced and Advantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Advanced 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.| New Advanced vs. Advantech Co | New Advanced vs. IEI Integration Corp | New Advanced vs. Flytech Technology Co | New Advanced vs. ADLINK Technology |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |