Correlation Between ADLINK Technology and Galaxy Software
Can any of the company-specific risk be diversified away by investing in both ADLINK Technology and Galaxy Software 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 Galaxy Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADLINK Technology and Galaxy Software Services, you can compare the effects of market volatilities on ADLINK Technology and Galaxy Software 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 Galaxy Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADLINK Technology and Galaxy Software.
Diversification Opportunities for ADLINK Technology and Galaxy Software
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ADLINK and Galaxy is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding ADLINK Technology and Galaxy Software Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Software Services 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 Galaxy Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Software Services has no effect on the direction of ADLINK Technology i.e., ADLINK Technology and Galaxy Software go up and down completely randomly.
Pair Corralation between ADLINK Technology and Galaxy Software
Assuming the 90 days trading horizon ADLINK Technology is expected to generate 0.96 times more return on investment than Galaxy Software. However, ADLINK Technology is 1.04 times less risky than Galaxy Software. It trades about 0.16 of its potential returns per unit of risk. Galaxy Software Services is currently generating about -0.01 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADLINK Technology vs. Galaxy Software Services
Performance |
| Timeline |
| ADLINK Technology |
| Galaxy Software Services |
ADLINK Technology and Galaxy Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADLINK Technology and Galaxy Software
The main advantage of trading using opposite ADLINK Technology and Galaxy Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADLINK Technology position performs unexpectedly, Galaxy Software 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 Galaxy Software will offset losses from the drop in Galaxy Software'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 |
| Galaxy Software vs. YuantaP shares Taiwan Electronics | Galaxy Software vs. YuantaP shares Taiwan Top | Galaxy Software vs. YuantaP shares Taiwan Mid Cap | Galaxy Software vs. Fubon MSCI Taiwan |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |