Correlation Between Asia Electronic and Advantech
Can any of the company-specific risk be diversified away by investing in both Asia Electronic 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 Asia Electronic and Advantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Electronic Material and Advantech Co, you can compare the effects of market volatilities on Asia Electronic 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 Asia Electronic with a short position of Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Electronic and Advantech.
Diversification Opportunities for Asia Electronic and Advantech
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asia and Advantech is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Asia Electronic Material and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech and Asia Electronic 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 Asia Electronic Material 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 Asia Electronic i.e., Asia Electronic and Advantech go up and down completely randomly.
Pair Corralation between Asia Electronic and Advantech
Assuming the 90 days trading horizon Asia Electronic Material is expected to generate 1.2 times more return on investment than Advantech. However, Asia Electronic is 1.2 times more volatile than Advantech Co. It trades about 0.04 of its potential returns per unit of risk. Advantech Co is currently generating about 0.02 per unit of risk. If you would invest 1,565 in Asia Electronic Material on August 26, 2024 and sell it today you would earn a total of 460.00 from holding Asia Electronic Material or generate 29.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Asia Electronic Material vs. Advantech Co
Performance |
| Timeline |
| Asia Electronic Material |
| Advantech |
Asia Electronic and Advantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Electronic and Advantech
The main advantage of trading using opposite Asia Electronic and Advantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Electronic 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.| Asia Electronic vs. Advantech Co | Asia Electronic vs. IEI Integration Corp | Asia Electronic vs. Flytech Technology Co | Asia Electronic 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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