Correlation Between ADLINK Technology and Chialin Precision
Can any of the company-specific risk be diversified away by investing in both ADLINK Technology and Chialin Precision 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 Chialin Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADLINK Technology and Chialin Precision Industrial, you can compare the effects of market volatilities on ADLINK Technology and Chialin Precision 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 Chialin Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADLINK Technology and Chialin Precision.
Diversification Opportunities for ADLINK Technology and Chialin Precision
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ADLINK and Chialin is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding ADLINK Technology and Chialin Precision Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chialin Precision 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 Chialin Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chialin Precision has no effect on the direction of ADLINK Technology i.e., ADLINK Technology and Chialin Precision go up and down completely randomly.
Pair Corralation between ADLINK Technology and Chialin Precision
Assuming the 90 days trading horizon ADLINK Technology is expected to generate 1.75 times more return on investment than Chialin Precision. However, ADLINK Technology is 1.75 times more volatile than Chialin Precision Industrial. It trades about 0.08 of its potential returns per unit of risk. Chialin Precision Industrial is currently generating about 0.02 per unit of risk. If you would invest 6,960 in ADLINK Technology on August 30, 2024 and sell it today you would earn a total of 420.00 from holding ADLINK Technology or generate 6.03% 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. Chialin Precision Industrial
Performance |
| Timeline |
| ADLINK Technology |
| Chialin Precision |
ADLINK Technology and Chialin Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADLINK Technology and Chialin Precision
The main advantage of trading using opposite ADLINK Technology and Chialin Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADLINK Technology position performs unexpectedly, Chialin Precision 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 Chialin Precision will offset losses from the drop in Chialin Precision's long position.| ADLINK Technology vs. Otsuka Information Technology | ADLINK Technology vs. Mitake Information | ADLINK Technology vs. K Way Information | ADLINK Technology vs. Provision Information CoLtd |
| Chialin Precision vs. Hon Hai Precision | Chialin Precision vs. Delta Electronics | Chialin Precision vs. LARGAN Precision Co | Chialin Precision vs. E Ink Holdings |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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