Correlation Between Aiptek International and Ardentec
Can any of the company-specific risk be diversified away by investing in both Aiptek International 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 Aiptek International and Ardentec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aiptek International and Ardentec, you can compare the effects of market volatilities on Aiptek International 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 Aiptek International with a short position of Ardentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aiptek International and Ardentec.
Diversification Opportunities for Aiptek International and Ardentec
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aiptek and Ardentec is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Aiptek International and Ardentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardentec and Aiptek International 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 Aiptek International 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 Aiptek International i.e., Aiptek International and Ardentec go up and down completely randomly.
Pair Corralation between Aiptek International and Ardentec
Assuming the 90 days trading horizon Aiptek International is expected to generate 3.01 times less return on investment than Ardentec. In addition to that, Aiptek International is 1.51 times more volatile than Ardentec. It trades about 0.02 of its total potential returns per unit of risk. Ardentec is currently generating about 0.11 per unit of volatility. If you would invest 5,440 in Ardentec on October 9, 2024 and sell it today you would earn a total of 320.00 from holding Ardentec or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aiptek International vs. Ardentec
Performance |
| Timeline |
| Aiptek International |
| Ardentec |
Aiptek International and Ardentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aiptek International and Ardentec
The main advantage of trading using opposite Aiptek International and Ardentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aiptek International 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.| Aiptek International vs. Kinko Optical Co | Aiptek International vs. Altek Corp | Aiptek International vs. Harvatek Corp | Aiptek International vs. Asia Optical Co |
| Ardentec vs. WT Microelectronics Co | Ardentec vs. Lien Chang Electronic | Ardentec vs. Camellia Metal Co | Ardentec vs. Compal Electronics |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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