Correlation Between Ablerex Electronics and Advantech
Can any of the company-specific risk be diversified away by investing in both Ablerex 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 Ablerex Electronics and Advantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ablerex Electronics Co and Advantech Co, you can compare the effects of market volatilities on Ablerex 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 Ablerex Electronics with a short position of Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ablerex Electronics and Advantech.
Diversification Opportunities for Ablerex Electronics and Advantech
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ablerex and Advantech is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ablerex Electronics Co and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech and Ablerex 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 Ablerex Electronics Co 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 Ablerex Electronics i.e., Ablerex Electronics and Advantech go up and down completely randomly.
Pair Corralation between Ablerex Electronics and Advantech
Assuming the 90 days trading horizon Ablerex Electronics Co is expected to generate 1.05 times more return on investment than Advantech. However, Ablerex Electronics is 1.05 times more volatile than Advantech Co. It trades about 0.03 of its potential returns per unit of risk. Advantech Co is currently generating about 0.0 per unit of risk. If you would invest 4,395 in Ablerex Electronics Co on August 27, 2024 and sell it today you would earn a total of 455.00 from holding Ablerex Electronics Co or generate 10.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ablerex Electronics Co vs. Advantech Co
Performance |
| Timeline |
| Ablerex Electronics |
| Advantech |
Ablerex Electronics and Advantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ablerex Electronics and Advantech
The main advantage of trading using opposite Ablerex Electronics and Advantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ablerex 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.| Ablerex Electronics vs. Advantech Co | Ablerex Electronics vs. IEI Integration Corp | Ablerex Electronics vs. Flytech Technology Co | Ablerex Electronics 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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