Correlation Between Arcadyan Technology and Zhen Ding
Can any of the company-specific risk be diversified away by investing in both Arcadyan Technology and Zhen Ding 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 Arcadyan Technology and Zhen Ding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcadyan Technology Corp and Zhen Ding Technology, you can compare the effects of market volatilities on Arcadyan Technology and Zhen Ding 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 Arcadyan Technology with a short position of Zhen Ding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcadyan Technology and Zhen Ding.
Diversification Opportunities for Arcadyan Technology and Zhen Ding
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arcadyan and Zhen is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Arcadyan Technology Corp and Zhen Ding Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhen Ding Technology and Arcadyan Technology 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 Arcadyan Technology Corp are associated (or correlated) with Zhen Ding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhen Ding Technology has no effect on the direction of Arcadyan Technology i.e., Arcadyan Technology and Zhen Ding go up and down completely randomly.
Pair Corralation between Arcadyan Technology and Zhen Ding
Assuming the 90 days trading horizon Arcadyan Technology Corp is expected to generate 1.13 times more return on investment than Zhen Ding. However, Arcadyan Technology is 1.13 times more volatile than Zhen Ding Technology. It trades about 0.06 of its potential returns per unit of risk. Zhen Ding Technology is currently generating about 0.02 per unit of risk. If you would invest 11,800 in Arcadyan Technology Corp on September 4, 2024 and sell it today you would earn a total of 5,600 from holding Arcadyan Technology Corp or generate 47.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcadyan Technology Corp vs. Zhen Ding Technology
Performance |
| Timeline |
| Arcadyan Technology Corp |
| Zhen Ding Technology |
Arcadyan Technology and Zhen Ding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcadyan Technology and Zhen Ding
The main advantage of trading using opposite Arcadyan Technology and Zhen Ding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcadyan Technology position performs unexpectedly, Zhen Ding 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 Zhen Ding will offset losses from the drop in Zhen Ding's long position.| Arcadyan Technology vs. Sercomm Corp | Arcadyan Technology vs. Wistron NeWeb Corp | Arcadyan Technology vs. Accton Technology Corp | Arcadyan Technology vs. Gemtek Technology Co |
| Zhen Ding vs. Taiwan Semiconductor Manufacturing | Zhen Ding vs. Yang Ming Marine | Zhen Ding vs. ASE Industrial Holding | Zhen Ding vs. AU Optronics |
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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