Correlation Between Sino American and Ardentec
Can any of the company-specific risk be diversified away by investing in both Sino American and Ardentec 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 Sino American and Ardentec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sino American Silicon Products and Ardentec, you can compare the effects of market volatilities on Sino American and Ardentec 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 Sino American with a short position of Ardentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino American and Ardentec.
Diversification Opportunities for Sino American and Ardentec
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sino and Ardentec is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Sino American Silicon Products and Ardentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardentec and Sino American 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 Sino American Silicon Products are associated (or correlated) with Ardentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardentec has no effect on the direction of Sino American i.e., Sino American and Ardentec go up and down completely randomly.
Pair Corralation between Sino American and Ardentec
Assuming the 90 days trading horizon Sino American is expected to generate 1.44 times less return on investment than Ardentec. In addition to that, Sino American is 1.04 times more volatile than Ardentec. It trades about 0.02 of its total potential returns per unit of risk. Ardentec is currently generating about 0.03 per unit of volatility. If you would invest 4,546 in Ardentec on August 30, 2024 and sell it today you would earn a total of 884.00 from holding Ardentec or generate 19.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sino American Silicon Products vs. Ardentec
Performance |
| Timeline |
| Sino American Silicon |
| Ardentec |
Sino American and Ardentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino American and Ardentec
The main advantage of trading using opposite Sino American and Ardentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino American position performs unexpectedly, Ardentec 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 Ardentec will offset losses from the drop in Ardentec's long position.| Sino American vs. Powertech Technology | Sino American vs. Formosa Sumco Technology | Sino American vs. Radiant Opto Electronics Corp | Sino American vs. Faraday Technology Corp |
| Ardentec vs. Powertech Technology | Ardentec vs. Formosa Sumco Technology | Ardentec vs. Radiant Opto Electronics Corp | Ardentec vs. Faraday Technology Corp |
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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