Correlation Between ADLINK Technology and ESUN Financial
Can any of the company-specific risk be diversified away by investing in both ADLINK Technology and ESUN Financial 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 ADLINK Technology and ESUN Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADLINK Technology and ESUN Financial Holding, you can compare the effects of market volatilities on ADLINK Technology and ESUN Financial 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 ADLINK Technology with a short position of ESUN Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADLINK Technology and ESUN Financial.
Diversification Opportunities for ADLINK Technology and ESUN Financial
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ADLINK and ESUN is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding ADLINK Technology and ESUN Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESUN Financial Holding and ADLINK Technology 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 ADLINK Technology are associated (or correlated) with ESUN Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESUN Financial Holding has no effect on the direction of ADLINK Technology i.e., ADLINK Technology and ESUN Financial go up and down completely randomly.
Pair Corralation between ADLINK Technology and ESUN Financial
Assuming the 90 days trading horizon ADLINK Technology is expected to generate 2.42 times more return on investment than ESUN Financial. However, ADLINK Technology is 2.42 times more volatile than ESUN Financial Holding. It trades about 0.07 of its potential returns per unit of risk. ESUN Financial Holding is currently generating about -0.01 per unit of risk. If you would invest 6,950 in ADLINK Technology on August 31, 2024 and sell it today you would earn a total of 220.00 from holding ADLINK Technology or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADLINK Technology vs. ESUN Financial Holding
Performance |
| Timeline |
| ADLINK Technology |
| ESUN Financial Holding |
ADLINK Technology and ESUN Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADLINK Technology and ESUN Financial
The main advantage of trading using opposite ADLINK Technology and ESUN Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADLINK Technology position performs unexpectedly, ESUN Financial 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 ESUN Financial will offset losses from the drop in ESUN Financial's long position.| ADLINK Technology vs. Hsin Kuang Steel | ADLINK Technology vs. Chief Telecom | ADLINK Technology vs. Ever Clear Environmental Eng | ADLINK Technology vs. Mayer Steel Pipe |
| ESUN Financial vs. Central Reinsurance Corp | ESUN Financial vs. Huaku Development Co | ESUN Financial vs. Fubon Financial Holding | ESUN Financial vs. Chailease Holding Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |