Correlation Between Trade Van and Ardentec
Can any of the company-specific risk be diversified away by investing in both Trade Van and Ardentec 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 Trade Van and Ardentec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trade Van Information Services and Ardentec, you can compare the effects of market volatilities on Trade Van and Ardentec 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 Trade Van with a short position of Ardentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Van and Ardentec.
Diversification Opportunities for Trade Van and Ardentec
Very weak diversification
The 3 months correlation between Trade and Ardentec is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Trade Van Information Services and Ardentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardentec and Trade Van 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 Trade Van Information Services are associated (or correlated) with Ardentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardentec has no effect on the direction of Trade Van i.e., Trade Van and Ardentec go up and down completely randomly.
Pair Corralation between Trade Van and Ardentec
Assuming the 90 days trading horizon Trade Van is expected to generate 1.39 times less return on investment than Ardentec. But when comparing it to its historical volatility, Trade Van Information Services is 2.41 times less risky than Ardentec. It trades about 0.33 of its potential returns per unit of risk. Ardentec is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,520 in Ardentec on October 22, 2024 and sell it today you would earn a total of 680.00 from holding Ardentec or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trade Van Information Services vs. Ardentec
Performance |
| Timeline |
| Trade Van Information |
| Ardentec |
Trade Van and Ardentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trade Van and Ardentec
The main advantage of trading using opposite Trade Van and Ardentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Van position performs unexpectedly, Ardentec 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 Ardentec will offset losses from the drop in Ardentec's long position.| Trade Van vs. Taiwan Sakura Corp | Trade Van vs. Charoen Pokphand Enterprise | Trade Van vs. Taiwan Cogeneration Corp | Trade Van vs. Taiwan Secom Co |
| Ardentec vs. U Media Communications | Ardentec vs. Daxin Materials Corp | Ardentec vs. Formosan Rubber Group | Ardentec vs. WinMate Communication INC |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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