Correlation Between ADLINK Technology and Sunmax Biotechnology
Can any of the company-specific risk be diversified away by investing in both ADLINK Technology and Sunmax Biotechnology 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 Sunmax Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADLINK Technology and Sunmax Biotechnology Co, you can compare the effects of market volatilities on ADLINK Technology and Sunmax Biotechnology 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 Sunmax Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADLINK Technology and Sunmax Biotechnology.
Diversification Opportunities for ADLINK Technology and Sunmax Biotechnology
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ADLINK and Sunmax is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ADLINK Technology and Sunmax Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunmax Biotechnology 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 Sunmax Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunmax Biotechnology has no effect on the direction of ADLINK Technology i.e., ADLINK Technology and Sunmax Biotechnology go up and down completely randomly.
Pair Corralation between ADLINK Technology and Sunmax Biotechnology
Assuming the 90 days trading horizon ADLINK Technology is expected to generate 2.58 times more return on investment than Sunmax Biotechnology. However, ADLINK Technology is 2.58 times more volatile than Sunmax Biotechnology Co. It trades about 0.12 of its potential returns per unit of risk. Sunmax Biotechnology Co is currently generating about 0.2 per unit of risk. If you would invest 6,950 in ADLINK Technology on September 1, 2024 and sell it today you would earn a total of 400.00 from holding ADLINK Technology or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADLINK Technology vs. Sunmax Biotechnology Co
Performance |
| Timeline |
| ADLINK Technology |
| Sunmax Biotechnology |
ADLINK Technology and Sunmax Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADLINK Technology and Sunmax Biotechnology
The main advantage of trading using opposite ADLINK Technology and Sunmax Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADLINK Technology position performs unexpectedly, Sunmax Biotechnology 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 Sunmax Biotechnology will offset losses from the drop in Sunmax Biotechnology's long position.| ADLINK Technology vs. CKM Building Material | ADLINK Technology vs. Cowealth Medical Holding | ADLINK Technology vs. Level Biotechnology | ADLINK Technology vs. Nankang Rubber Tire |
| Sunmax Biotechnology vs. Medigen Vaccine Biologics | Sunmax Biotechnology vs. OBI Pharma | Sunmax Biotechnology vs. TaiMed Biologics | Sunmax Biotechnology vs. Tanvex BioPharma |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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