Correlation Between ADLINK Technology and X Legend
Can any of the company-specific risk be diversified away by investing in both ADLINK Technology and X Legend 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 X Legend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADLINK Technology and X Legend Entertainment Co, you can compare the effects of market volatilities on ADLINK Technology and X Legend 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 X Legend. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADLINK Technology and X Legend.
Diversification Opportunities for ADLINK Technology and X Legend
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ADLINK and 4994 is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ADLINK Technology and X Legend Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Legend Entertainment 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 X Legend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Legend Entertainment has no effect on the direction of ADLINK Technology i.e., ADLINK Technology and X Legend go up and down completely randomly.
Pair Corralation between ADLINK Technology and X Legend
Assuming the 90 days trading horizon ADLINK Technology is expected to generate 2.91 times more return on investment than X Legend. However, ADLINK Technology is 2.91 times more volatile than X Legend Entertainment Co. It trades about 0.24 of its potential returns per unit of risk. X Legend Entertainment Co is currently generating about 0.12 per unit of risk. If you would invest 7,550 in ADLINK Technology on November 28, 2024 and sell it today you would earn a total of 890.00 from holding ADLINK Technology or generate 11.79% 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. X Legend Entertainment Co
Performance |
| Timeline |
| ADLINK Technology |
| X Legend Entertainment |
ADLINK Technology and X Legend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADLINK Technology and X Legend
The main advantage of trading using opposite ADLINK Technology and X Legend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADLINK Technology position performs unexpectedly, X Legend 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 X Legend will offset losses from the drop in X Legend's long position.| ADLINK Technology vs. Shin Kong Financial | ADLINK Technology vs. Taishin Financial Holding | ADLINK Technology vs. Shinkong Insurance Co | ADLINK Technology vs. Oceanic Beverages Co |
| X Legend vs. Abnova Taiwan Corp | X Legend vs. Cheng Mei Materials | X Legend vs. BizLink Holding | X Legend vs. Lemtech Holdings 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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