Correlation Between ADLINK Technology and Avalue Technology
Can any of the company-specific risk be diversified away by investing in both ADLINK Technology and Avalue Technology 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 Avalue Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADLINK Technology and Avalue Technology, you can compare the effects of market volatilities on ADLINK Technology and Avalue Technology 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 Avalue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADLINK Technology and Avalue Technology.
Diversification Opportunities for ADLINK Technology and Avalue Technology
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ADLINK and Avalue is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding ADLINK Technology and Avalue Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avalue Technology 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 Avalue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avalue Technology has no effect on the direction of ADLINK Technology i.e., ADLINK Technology and Avalue Technology go up and down completely randomly.
Pair Corralation between ADLINK Technology and Avalue Technology
Assuming the 90 days trading horizon ADLINK Technology is expected to generate 1.52 times more return on investment than Avalue Technology. However, ADLINK Technology is 1.52 times more volatile than Avalue Technology. It trades about 0.07 of its potential returns per unit of risk. Avalue Technology is currently generating about -0.09 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADLINK Technology vs. Avalue Technology
Performance |
| Timeline |
| ADLINK Technology |
| Avalue Technology |
ADLINK Technology and Avalue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADLINK Technology and Avalue Technology
The main advantage of trading using opposite ADLINK Technology and Avalue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADLINK Technology position performs unexpectedly, Avalue Technology 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 Avalue Technology will offset losses from the drop in Avalue Technology'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 |
| Avalue Technology vs. Quanta Computer | Avalue Technology vs. Wiwynn Corp | Avalue Technology vs. Getac Technology Corp | Avalue Technology vs. InnoDisk |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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