Correlation Between Advanced Energy and Dynapack International
Can any of the company-specific risk be diversified away by investing in both Advanced Energy and Dynapack International 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 Dynapack International 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 Dynapack International Technology, you can compare the effects of market volatilities on Advanced Energy and Dynapack International 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 Dynapack International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Energy and Dynapack International.
Diversification Opportunities for Advanced Energy and Dynapack International
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Advanced and Dynapack is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Energy Solution and Dynapack International Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynapack International 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 Dynapack International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynapack International has no effect on the direction of Advanced Energy i.e., Advanced Energy and Dynapack International go up and down completely randomly.
Pair Corralation between Advanced Energy and Dynapack International
Assuming the 90 days trading horizon Advanced Energy Solution is expected to generate 1.02 times more return on investment than Dynapack International. However, Advanced Energy is 1.02 times more volatile than Dynapack International Technology. It trades about 0.31 of its potential returns per unit of risk. Dynapack International Technology is currently generating about 0.2 per unit of risk. If you would invest 48,900 in Advanced Energy Solution on October 24, 2024 and sell it today you would earn a total of 75,100 from holding Advanced Energy Solution or generate 153.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Energy Solution vs. Dynapack International Technol
Performance |
| Timeline |
| Advanced Energy Solution |
| Dynapack International |
Advanced Energy and Dynapack International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Energy and Dynapack International
The main advantage of trading using opposite Advanced Energy and Dynapack International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Energy position performs unexpectedly, Dynapack International 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 Dynapack International will offset losses from the drop in Dynapack International's long position.| Advanced Energy vs. Nan Ya Printed | Advanced Energy vs. Lotes Co | Advanced Energy vs. eMemory Technology | Advanced Energy vs. Alchip Technologies |
| Dynapack International vs. Excelsior Medical Co | Dynapack International vs. Voltronic Power Technology | Dynapack International vs. AzureWave Technologies | Dynapack International vs. Wholetech System Hitech |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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