Correlation Between Galaxy Software and ADLINK Technology
Can any of the company-specific risk be diversified away by investing in both Galaxy Software and ADLINK 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 Galaxy Software and ADLINK Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galaxy Software Services and ADLINK Technology, you can compare the effects of market volatilities on Galaxy Software and ADLINK 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 Galaxy Software with a short position of ADLINK Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Software and ADLINK Technology.
Diversification Opportunities for Galaxy Software and ADLINK Technology
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Galaxy and ADLINK is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Software Services and ADLINK Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADLINK Technology and Galaxy Software 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 Galaxy Software Services are associated (or correlated) with ADLINK Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADLINK Technology has no effect on the direction of Galaxy Software i.e., Galaxy Software and ADLINK Technology go up and down completely randomly.
Pair Corralation between Galaxy Software and ADLINK Technology
Assuming the 90 days trading horizon Galaxy Software Services is expected to under-perform the ADLINK Technology. In addition to that, Galaxy Software is 1.04 times more volatile than ADLINK Technology. It trades about -0.01 of its total potential returns per unit of risk. ADLINK Technology is currently generating about 0.16 per unit of volatility. If you would invest 6,850 in ADLINK Technology on August 30, 2024 and sell it today you would earn a total of 530.00 from holding ADLINK Technology or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galaxy Software Services vs. ADLINK Technology
Performance |
| Timeline |
| Galaxy Software Services |
| ADLINK Technology |
Galaxy Software and ADLINK Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galaxy Software and ADLINK Technology
The main advantage of trading using opposite Galaxy Software and ADLINK Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Software position performs unexpectedly, ADLINK 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 ADLINK Technology will offset losses from the drop in ADLINK Technology's long position.| Galaxy Software vs. YuantaP shares Taiwan Electronics | Galaxy Software vs. YuantaP shares Taiwan Top | Galaxy Software vs. YuantaP shares Taiwan Mid Cap | Galaxy Software vs. Fubon MSCI Taiwan |
| ADLINK Technology vs. BenQ Materials Corp | ADLINK Technology vs. CKM Building Material | ADLINK Technology vs. Hannstar Display Corp | ADLINK Technology vs. RiTdisplay Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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