Correlation Between Ennostar and Advantech
Can any of the company-specific risk be diversified away by investing in both Ennostar 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 Ennostar and Advantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ennostar and Advantech Co, you can compare the effects of market volatilities on Ennostar 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 Ennostar with a short position of Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ennostar and Advantech.
Diversification Opportunities for Ennostar and Advantech
Good diversification
The 3 months correlation between Ennostar and Advantech is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ennostar and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech and Ennostar 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 Ennostar 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 Ennostar i.e., Ennostar and Advantech go up and down completely randomly.
Pair Corralation between Ennostar and Advantech
Assuming the 90 days trading horizon Ennostar is expected to generate 1.54 times less return on investment than Advantech. In addition to that, Ennostar is 1.11 times more volatile than Advantech Co. It trades about 0.01 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 32,185 in Advantech Co on August 29, 2024 and sell it today you would earn a total of 2,565 from holding Advantech Co or generate 7.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Ennostar vs. Advantech Co
Performance |
| Timeline |
| Ennostar |
| Advantech |
Ennostar and Advantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ennostar and Advantech
The main advantage of trading using opposite Ennostar and Advantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ennostar 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.| Ennostar vs. Innolux Corp | Ennostar vs. United Renewable Energy | Ennostar vs. Acbel Polytech | Ennostar vs. Gigastorage Corp |
| Advantech vs. Delta Electronics | Advantech vs. Quanta Computer | Advantech vs. Realtek Semiconductor Corp | Advantech vs. President Chain Store |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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