Correlation Between ADLINK Technology and Chien Kuo
Can any of the company-specific risk be diversified away by investing in both ADLINK Technology and Chien Kuo 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 Chien Kuo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADLINK Technology and Chien Kuo Construction, you can compare the effects of market volatilities on ADLINK Technology and Chien Kuo 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 Chien Kuo. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADLINK Technology and Chien Kuo.
Diversification Opportunities for ADLINK Technology and Chien Kuo
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ADLINK and Chien is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ADLINK Technology and Chien Kuo Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chien Kuo Construction 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 Chien Kuo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chien Kuo Construction has no effect on the direction of ADLINK Technology i.e., ADLINK Technology and Chien Kuo go up and down completely randomly.
Pair Corralation between ADLINK Technology and Chien Kuo
Assuming the 90 days trading horizon ADLINK Technology is expected to generate 0.74 times more return on investment than Chien Kuo. However, ADLINK Technology is 1.35 times less risky than Chien Kuo. It trades about 0.16 of its potential returns per unit of risk. Chien Kuo Construction is currently generating about 0.1 per unit of risk. If you would invest 6,850 in ADLINK Technology on August 30, 2024 and sell it today you would earn a total of 530.00 from holding ADLINK Technology or generate 7.74% 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. Chien Kuo Construction
Performance |
| Timeline |
| ADLINK Technology |
| Chien Kuo Construction |
ADLINK Technology and Chien Kuo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADLINK Technology and Chien Kuo
The main advantage of trading using opposite ADLINK Technology and Chien Kuo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADLINK Technology position performs unexpectedly, Chien Kuo 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 Chien Kuo will offset losses from the drop in Chien Kuo'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 |
| Chien Kuo vs. Yulon Motor Co | Chien Kuo vs. Far Eastern Department | Chien Kuo vs. China Steel Corp | Chien Kuo vs. Chang Hwa Commercial |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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