Correlation Between ADLINK Technology and Chander Electronics
Can any of the company-specific risk be diversified away by investing in both ADLINK Technology and Chander Electronics 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 Chander Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADLINK Technology and Chander Electronics Corp, you can compare the effects of market volatilities on ADLINK Technology and Chander Electronics 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 Chander Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADLINK Technology and Chander Electronics.
Diversification Opportunities for ADLINK Technology and Chander Electronics
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ADLINK and Chander is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding ADLINK Technology and Chander Electronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chander Electronics 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 Chander Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chander Electronics Corp has no effect on the direction of ADLINK Technology i.e., ADLINK Technology and Chander Electronics go up and down completely randomly.
Pair Corralation between ADLINK Technology and Chander Electronics
Assuming the 90 days trading horizon ADLINK Technology is expected to generate 0.94 times more return on investment than Chander Electronics. However, ADLINK Technology is 1.06 times less risky than Chander Electronics. It trades about 0.01 of its potential returns per unit of risk. Chander Electronics Corp is currently generating about -0.04 per unit of risk. If you would invest 7,760 in ADLINK Technology on August 29, 2024 and sell it today you would lose (150.00) from holding ADLINK Technology or give up 1.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADLINK Technology vs. Chander Electronics Corp
Performance |
| Timeline |
| ADLINK Technology |
| Chander Electronics Corp |
ADLINK Technology and Chander Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADLINK Technology and Chander Electronics
The main advantage of trading using opposite ADLINK Technology and Chander Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADLINK Technology position performs unexpectedly, Chander Electronics 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 Chander Electronics will offset losses from the drop in Chander Electronics' long position.| ADLINK Technology vs. Ibase Gaming | ADLINK Technology vs. Bank of Kaohsiung | ADLINK Technology vs. International Games System | ADLINK Technology vs. Chinese Gamer International |
| Chander Electronics vs. Advantech Co | Chander Electronics vs. IEI Integration Corp | Chander Electronics vs. Flytech Technology Co | Chander Electronics vs. ADLINK Technology |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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