Correlation Between ADLINK Technology and Newretail
Can any of the company-specific risk be diversified away by investing in both ADLINK Technology and Newretail 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 Newretail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADLINK Technology and Newretail Co, you can compare the effects of market volatilities on ADLINK Technology and Newretail 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 Newretail. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADLINK Technology and Newretail.
Diversification Opportunities for ADLINK Technology and Newretail
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between ADLINK and Newretail is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding ADLINK Technology and Newretail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newretail 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 Newretail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newretail has no effect on the direction of ADLINK Technology i.e., ADLINK Technology and Newretail go up and down completely randomly.
Pair Corralation between ADLINK Technology and Newretail
Assuming the 90 days trading horizon ADLINK Technology is expected to generate 1.39 times less return on investment than Newretail. But when comparing it to its historical volatility, ADLINK Technology is 1.79 times less risky than Newretail. It trades about 0.04 of its potential returns per unit of risk. Newretail Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,030 in Newretail Co on August 24, 2024 and sell it today you would earn a total of 470.00 from holding Newretail Co or generate 23.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADLINK Technology vs. Newretail Co
Performance |
| Timeline |
| ADLINK Technology |
| Newretail |
ADLINK Technology and Newretail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADLINK Technology and Newretail
The main advantage of trading using opposite ADLINK Technology and Newretail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADLINK Technology position performs unexpectedly, Newretail 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 Newretail will offset losses from the drop in Newretail's long position.| ADLINK Technology vs. Novatek Microelectronics Corp | ADLINK Technology vs. MediaTek | ADLINK Technology vs. Quanta Computer | ADLINK Technology vs. United Microelectronics |
| Newretail vs. Addcn Technology Co | Newretail vs. PChome Online | Newretail vs. Sunfun Info Co | Newretail vs. Taiwan Taomee 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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