Correlation Between ADLINK Technology and Sensortek Technology
Can any of the company-specific risk be diversified away by investing in both ADLINK Technology and Sensortek 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 Sensortek 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 Sensortek Technology Corp, you can compare the effects of market volatilities on ADLINK Technology and Sensortek 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 Sensortek Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADLINK Technology and Sensortek Technology.
Diversification Opportunities for ADLINK Technology and Sensortek Technology
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between ADLINK and Sensortek is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding ADLINK Technology and Sensortek Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensortek Technology Corp 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 Sensortek Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensortek Technology Corp has no effect on the direction of ADLINK Technology i.e., ADLINK Technology and Sensortek Technology go up and down completely randomly.
Pair Corralation between ADLINK Technology and Sensortek Technology
Assuming the 90 days trading horizon ADLINK Technology is expected to generate 0.89 times more return on investment than Sensortek Technology. However, ADLINK Technology is 1.13 times less risky than Sensortek Technology. It trades about 0.04 of its potential returns per unit of risk. Sensortek Technology Corp is currently generating about 0.03 per unit of risk. If you would invest 5,230 in ADLINK Technology on August 30, 2024 and sell it today you would earn a total of 2,150 from holding ADLINK Technology or generate 41.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADLINK Technology vs. Sensortek Technology Corp
Performance |
| Timeline |
| ADLINK Technology |
| Sensortek Technology Corp |
ADLINK Technology and Sensortek Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADLINK Technology and Sensortek Technology
The main advantage of trading using opposite ADLINK Technology and Sensortek Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADLINK Technology position performs unexpectedly, Sensortek 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 Sensortek Technology will offset losses from the drop in Sensortek Technology'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 |
| Sensortek Technology vs. Hon Hai Precision | Sensortek Technology vs. Delta Electronics | Sensortek Technology vs. LARGAN Precision Co | Sensortek Technology 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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