Correlation Between Adimmune Corp and Formosa Laboratories
Can any of the company-specific risk be diversified away by investing in both Adimmune Corp and Formosa Laboratories 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 Adimmune Corp and Formosa Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adimmune Corp and Formosa Laboratories, you can compare the effects of market volatilities on Adimmune Corp and Formosa Laboratories 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 Adimmune Corp with a short position of Formosa Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adimmune Corp and Formosa Laboratories.
Diversification Opportunities for Adimmune Corp and Formosa Laboratories
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Adimmune and Formosa is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Adimmune Corp and Formosa Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formosa Laboratories and Adimmune Corp 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 Adimmune Corp are associated (or correlated) with Formosa Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formosa Laboratories has no effect on the direction of Adimmune Corp i.e., Adimmune Corp and Formosa Laboratories go up and down completely randomly.
Pair Corralation between Adimmune Corp and Formosa Laboratories
Assuming the 90 days trading horizon Adimmune Corp is expected to generate 0.74 times more return on investment than Formosa Laboratories. However, Adimmune Corp is 1.35 times less risky than Formosa Laboratories. It trades about -0.47 of its potential returns per unit of risk. Formosa Laboratories is currently generating about -0.48 per unit of risk. If you would invest 2,410 in Adimmune Corp on September 3, 2024 and sell it today you would lose (290.00) from holding Adimmune Corp or give up 12.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adimmune Corp vs. Formosa Laboratories
Performance |
| Timeline |
| Adimmune Corp |
| Formosa Laboratories |
Adimmune Corp and Formosa Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adimmune Corp and Formosa Laboratories
The main advantage of trading using opposite Adimmune Corp and Formosa Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adimmune Corp position performs unexpectedly, Formosa Laboratories 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 Formosa Laboratories will offset losses from the drop in Formosa Laboratories' long position.| Adimmune Corp vs. Sinphar Pharmaceutical Co | Adimmune Corp vs. WiseChip Semiconductor | Adimmune Corp vs. Novatek Microelectronics Corp | Adimmune Corp vs. Leader Electronics |
| Formosa Laboratories vs. Adimmune Corp | Formosa Laboratories vs. Chunghwa Chemical Synthesis | Formosa Laboratories vs. SCI Pharmtech | Formosa Laboratories vs. Grape King Bio |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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