Correlation Between Grand Ocean and Ardentec
Can any of the company-specific risk be diversified away by investing in both Grand Ocean 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 Grand Ocean and Ardentec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Ocean Retail and Ardentec, you can compare the effects of market volatilities on Grand Ocean 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 Grand Ocean with a short position of Ardentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Ocean and Ardentec.
Diversification Opportunities for Grand Ocean and Ardentec
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grand and Ardentec is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Grand Ocean Retail and Ardentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardentec and Grand Ocean 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 Grand Ocean Retail 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 Grand Ocean i.e., Grand Ocean and Ardentec go up and down completely randomly.
Pair Corralation between Grand Ocean and Ardentec
Assuming the 90 days trading horizon Grand Ocean Retail is expected to under-perform the Ardentec. In addition to that, Grand Ocean is 1.02 times more volatile than Ardentec. It trades about -0.33 of its total potential returns per unit of risk. Ardentec is currently generating about 0.06 per unit of volatility. If you would invest 5,440 in Ardentec on October 7, 2024 and sell it today you would earn a total of 160.00 from holding Ardentec or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Ocean Retail vs. Ardentec
Performance |
| Timeline |
| Grand Ocean Retail |
| Ardentec |
Grand Ocean and Ardentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Ocean and Ardentec
The main advantage of trading using opposite Grand Ocean and Ardentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Ocean 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.| Grand Ocean vs. Ruentex Development Co | Grand Ocean vs. WiseChip Semiconductor | Grand Ocean vs. Leader Electronics | Grand Ocean vs. CTCI Corp |
| Ardentec vs. Para Light Electronics | Ardentec vs. ANJI Technology Co | Ardentec vs. Chia Chang Co | Ardentec vs. Aiptek International |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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