Correlation Between ADLINK Technology and Posiflex Technology
Can any of the company-specific risk be diversified away by investing in both ADLINK Technology and Posiflex 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 Posiflex 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 Posiflex Technology, you can compare the effects of market volatilities on ADLINK Technology and Posiflex 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 Posiflex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADLINK Technology and Posiflex Technology.
Diversification Opportunities for ADLINK Technology and Posiflex Technology
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ADLINK and Posiflex is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding ADLINK Technology and Posiflex Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posiflex Technology 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 Posiflex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posiflex Technology has no effect on the direction of ADLINK Technology i.e., ADLINK Technology and Posiflex Technology go up and down completely randomly.
Pair Corralation between ADLINK Technology and Posiflex Technology
Assuming the 90 days trading horizon ADLINK Technology is expected to generate 11.38 times less return on investment than Posiflex Technology. But when comparing it to its historical volatility, ADLINK Technology is 1.57 times less risky than Posiflex Technology. It trades about 0.07 of its potential returns per unit of risk. Posiflex Technology is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest 20,950 in Posiflex Technology on August 31, 2024 and sell it today you would earn a total of 10,400 from holding Posiflex Technology or generate 49.64% 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. Posiflex Technology
Performance |
| Timeline |
| ADLINK Technology |
| Posiflex Technology |
ADLINK Technology and Posiflex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADLINK Technology and Posiflex Technology
The main advantage of trading using opposite ADLINK Technology and Posiflex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADLINK Technology position performs unexpectedly, Posiflex 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 Posiflex Technology will offset losses from the drop in Posiflex Technology's long position.| ADLINK Technology vs. Hsin Kuang Steel | ADLINK Technology vs. Chief Telecom | ADLINK Technology vs. Ever Clear Environmental Eng | ADLINK Technology vs. Mayer Steel Pipe |
| Posiflex Technology vs. United Microelectronics | Posiflex Technology vs. Winbond Electronics Corp | Posiflex Technology vs. Macronix International 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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