Correlation Between Highlight Tech and Advantech
Can any of the company-specific risk be diversified away by investing in both Highlight Tech and Advantech 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 Highlight Tech and Advantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Tech and Advantech Co, you can compare the effects of market volatilities on Highlight Tech and Advantech 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 Highlight Tech with a short position of Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Tech and Advantech.
Diversification Opportunities for Highlight Tech and Advantech
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highlight and Advantech is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Tech and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech and Highlight Tech 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 Highlight Tech are associated (or correlated) with Advantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantech has no effect on the direction of Highlight Tech i.e., Highlight Tech and Advantech go up and down completely randomly.
Pair Corralation between Highlight Tech and Advantech
Assuming the 90 days trading horizon Highlight Tech is expected to generate 2.03 times more return on investment than Advantech. However, Highlight Tech is 2.03 times more volatile than Advantech Co. It trades about 0.0 of its potential returns per unit of risk. Advantech Co is currently generating about -0.03 per unit of risk. If you would invest 5,710 in Highlight Tech on September 3, 2024 and sell it today you would lose (350.00) from holding Highlight Tech or give up 6.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Tech vs. Advantech Co
Performance |
| Timeline |
| Highlight Tech |
| Advantech |
Highlight Tech and Advantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Tech and Advantech
The main advantage of trading using opposite Highlight Tech and Advantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Tech position performs unexpectedly, Advantech 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 Advantech will offset losses from the drop in Advantech's long position.| Highlight Tech vs. WiseChip Semiconductor | Highlight Tech vs. Novatek Microelectronics Corp | Highlight Tech vs. Leader Electronics | Highlight Tech vs. Information Technology Total |
| Advantech vs. Taiwan Semiconductor Manufacturing | Advantech vs. Yang Ming Marine | Advantech vs. ASE Industrial Holding | Advantech vs. AU Optronics |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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