Correlation Between Advanced Energy and Hi Lai
Can any of the company-specific risk be diversified away by investing in both Advanced Energy and Hi Lai 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 Advanced Energy and Hi Lai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Energy Solution and Hi Lai Foods Co, you can compare the effects of market volatilities on Advanced Energy and Hi Lai 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 Advanced Energy with a short position of Hi Lai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Energy and Hi Lai.
Diversification Opportunities for Advanced Energy and Hi Lai
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Advanced and 1268 is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Energy Solution and Hi Lai Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Lai Foods and Advanced Energy 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 Advanced Energy Solution are associated (or correlated) with Hi Lai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Lai Foods has no effect on the direction of Advanced Energy i.e., Advanced Energy and Hi Lai go up and down completely randomly.
Pair Corralation between Advanced Energy and Hi Lai
Assuming the 90 days trading horizon Advanced Energy Solution is expected to generate 6.65 times more return on investment than Hi Lai. However, Advanced Energy is 6.65 times more volatile than Hi Lai Foods Co. It trades about 0.23 of its potential returns per unit of risk. Hi Lai Foods Co is currently generating about 0.03 per unit of risk. If you would invest 85,000 in Advanced Energy Solution on October 23, 2024 and sell it today you would earn a total of 37,500 from holding Advanced Energy Solution or generate 44.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Energy Solution vs. Hi Lai Foods Co
Performance |
| Timeline |
| Advanced Energy Solution |
| Hi Lai Foods |
Advanced Energy and Hi Lai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Energy and Hi Lai
The main advantage of trading using opposite Advanced Energy and Hi Lai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Energy position performs unexpectedly, Hi Lai 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 Hi Lai will offset losses from the drop in Hi Lai's long position.| Advanced Energy vs. Nan Ya Printed | Advanced Energy vs. Lotes Co | Advanced Energy vs. eMemory Technology | Advanced Energy vs. Alchip Technologies |
| Hi Lai vs. Silicon Power Computer | Hi Lai vs. Dimension Computer Technology | Hi Lai vs. Elitegroup Computer Systems | Hi Lai vs. Jetwell Computer Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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