Correlation Between New Advanced and Amtran Technology
Can any of the company-specific risk be diversified away by investing in both New Advanced and Amtran 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 New Advanced and Amtran Technology 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 Amtran Technology Co, you can compare the effects of market volatilities on New Advanced and Amtran 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 New Advanced with a short position of Amtran Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Advanced and Amtran Technology.
Diversification Opportunities for New Advanced and Amtran Technology
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Amtran is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding New Advanced Electronics and Amtran Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtran Technology 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 Amtran Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtran Technology has no effect on the direction of New Advanced i.e., New Advanced and Amtran Technology go up and down completely randomly.
Pair Corralation between New Advanced and Amtran Technology
Assuming the 90 days trading horizon New Advanced Electronics is expected to under-perform the Amtran Technology. But the stock apears to be less risky and, when comparing its historical volatility, New Advanced Electronics is 1.62 times less risky than Amtran Technology. The stock trades about -0.08 of its potential returns per unit of risk. The Amtran Technology Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,075 in Amtran Technology Co on August 30, 2024 and sell it today you would lose (130.00) from holding Amtran Technology Co or give up 6.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Advanced Electronics vs. Amtran Technology Co
Performance |
| Timeline |
| New Advanced Electronics |
| Amtran Technology |
New Advanced and Amtran Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Advanced and Amtran Technology
The main advantage of trading using opposite New Advanced and Amtran Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Advanced position performs unexpectedly, Amtran 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 Amtran Technology will offset losses from the drop in Amtran Technology's long position.| New Advanced vs. Shan Loong Transportation Co | New Advanced vs. Vanguard International Semiconductor | New Advanced vs. Mospec Semiconductor Corp | New Advanced vs. Farglory FTZ Investment |
| Amtran Technology vs. Yulon Finance Corp | Amtran Technology vs. Taiwan Secom Co | Amtran Technology vs. Great Wall Enterprise |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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