Correlation Between Cowealth Medical and ADLINK Technology
Can any of the company-specific risk be diversified away by investing in both Cowealth Medical and ADLINK 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 Cowealth Medical and ADLINK Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cowealth Medical Holding and ADLINK Technology, you can compare the effects of market volatilities on Cowealth Medical and ADLINK 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 Cowealth Medical with a short position of ADLINK Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cowealth Medical and ADLINK Technology.
Diversification Opportunities for Cowealth Medical and ADLINK Technology
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cowealth and ADLINK is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cowealth Medical Holding and ADLINK Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADLINK Technology and Cowealth Medical 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 Cowealth Medical Holding are associated (or correlated) with ADLINK Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADLINK Technology has no effect on the direction of Cowealth Medical i.e., Cowealth Medical and ADLINK Technology go up and down completely randomly.
Pair Corralation between Cowealth Medical and ADLINK Technology
Assuming the 90 days trading horizon Cowealth Medical Holding is expected to under-perform the ADLINK Technology. But the stock apears to be less risky and, when comparing its historical volatility, Cowealth Medical Holding is 2.43 times less risky than ADLINK Technology. The stock trades about -0.03 of its potential returns per unit of risk. The ADLINK Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,100 in ADLINK Technology on December 1, 2024 and sell it today you would earn a total of 2,390 from holding ADLINK Technology or generate 39.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cowealth Medical Holding vs. ADLINK Technology
Performance |
| Timeline |
| Cowealth Medical Holding |
| ADLINK Technology |
Cowealth Medical and ADLINK Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cowealth Medical and ADLINK Technology
The main advantage of trading using opposite Cowealth Medical and ADLINK Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cowealth Medical position performs unexpectedly, ADLINK 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 ADLINK Technology will offset losses from the drop in ADLINK Technology's long position.| Cowealth Medical vs. Hsin Kuang Steel | Cowealth Medical vs. Simple Mart Retail | Cowealth Medical vs. Yeou Yih Steel | Cowealth Medical vs. Easywell Biomedicals |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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