Correlation Between ADLINK Technology and GenMont Biotech
Can any of the company-specific risk be diversified away by investing in both ADLINK Technology and GenMont Biotech 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 GenMont Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADLINK Technology and GenMont Biotech, you can compare the effects of market volatilities on ADLINK Technology and GenMont Biotech 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 GenMont Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADLINK Technology and GenMont Biotech.
Diversification Opportunities for ADLINK Technology and GenMont Biotech
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ADLINK and GenMont is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding ADLINK Technology and GenMont Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GenMont Biotech 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 GenMont Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GenMont Biotech has no effect on the direction of ADLINK Technology i.e., ADLINK Technology and GenMont Biotech go up and down completely randomly.
Pair Corralation between ADLINK Technology and GenMont Biotech
Assuming the 90 days trading horizon ADLINK Technology is expected to generate 1.88 times more return on investment than GenMont Biotech. However, ADLINK Technology is 1.88 times more volatile than GenMont Biotech. It trades about 0.19 of its potential returns per unit of risk. GenMont Biotech is currently generating about -0.2 per unit of risk. If you would invest 6,960 in ADLINK Technology on August 29, 2024 and sell it today you would earn a total of 650.00 from holding ADLINK Technology or generate 9.34% 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. GenMont Biotech
Performance |
| Timeline |
| ADLINK Technology |
| GenMont Biotech |
ADLINK Technology and GenMont Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADLINK Technology and GenMont Biotech
The main advantage of trading using opposite ADLINK Technology and GenMont Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADLINK Technology position performs unexpectedly, GenMont Biotech 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 GenMont Biotech will offset losses from the drop in GenMont Biotech's long position.| ADLINK Technology vs. BenQ Materials Corp | ADLINK Technology vs. CKM Building Material | ADLINK Technology vs. Hannstar Display Corp | ADLINK Technology vs. RiTdisplay Corp |
| GenMont Biotech vs. Avalue Technology | GenMont Biotech vs. Integrated Service Technology | GenMont Biotech vs. Sunmax Biotechnology Co | GenMont Biotech vs. ADLINK Technology |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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