Correlation Between Andes Technology and StShine Optical
Can any of the company-specific risk be diversified away by investing in both Andes Technology and StShine Optical 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 Andes Technology and StShine Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andes Technology Corp and StShine Optical Co, you can compare the effects of market volatilities on Andes Technology and StShine Optical 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 Andes Technology with a short position of StShine Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andes Technology and StShine Optical.
Diversification Opportunities for Andes Technology and StShine Optical
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Andes and StShine is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Andes Technology Corp and StShine Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StShine Optical and Andes 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 Andes Technology Corp are associated (or correlated) with StShine Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StShine Optical has no effect on the direction of Andes Technology i.e., Andes Technology and StShine Optical go up and down completely randomly.
Pair Corralation between Andes Technology and StShine Optical
Assuming the 90 days trading horizon Andes Technology Corp is expected to under-perform the StShine Optical. In addition to that, Andes Technology is 2.1 times more volatile than StShine Optical Co. It trades about -0.02 of its total potential returns per unit of risk. StShine Optical Co is currently generating about 0.0 per unit of volatility. If you would invest 22,614 in StShine Optical Co on September 4, 2024 and sell it today you would lose (314.00) from holding StShine Optical Co or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Andes Technology Corp vs. StShine Optical Co
Performance |
| Timeline |
| Andes Technology Corp |
| StShine Optical |
Andes Technology and StShine Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andes Technology and StShine Optical
The main advantage of trading using opposite Andes Technology and StShine Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andes Technology position performs unexpectedly, StShine Optical 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 StShine Optical will offset losses from the drop in StShine Optical's long position.| Andes Technology vs. Chung Hung Steel | Andes Technology vs. Central Reinsurance Corp | Andes Technology vs. Feng Hsin Steel | Andes Technology vs. Hsin Kuang Steel |
| StShine Optical vs. Landis Taipei Hotel | StShine Optical vs. Oceanic Beverages Co | StShine Optical vs. Far EasTone Telecommunications | StShine Optical vs. Ambassador Hotel |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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