Correlation Between Posiflex Technology and Advanced Ceramic
Can any of the company-specific risk be diversified away by investing in both Posiflex Technology and Advanced Ceramic 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 Posiflex Technology and Advanced Ceramic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Posiflex Technology and Advanced Ceramic X, you can compare the effects of market volatilities on Posiflex Technology and Advanced Ceramic 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 Posiflex Technology with a short position of Advanced Ceramic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Posiflex Technology and Advanced Ceramic.
Diversification Opportunities for Posiflex Technology and Advanced Ceramic
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Posiflex and Advanced is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Posiflex Technology and Advanced Ceramic X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Ceramic X and Posiflex 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 Posiflex Technology are associated (or correlated) with Advanced Ceramic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Ceramic X has no effect on the direction of Posiflex Technology i.e., Posiflex Technology and Advanced Ceramic go up and down completely randomly.
Pair Corralation between Posiflex Technology and Advanced Ceramic
Assuming the 90 days trading horizon Posiflex Technology is expected to generate 0.86 times more return on investment than Advanced Ceramic. However, Posiflex Technology is 1.16 times less risky than Advanced Ceramic. It trades about 0.2 of its potential returns per unit of risk. Advanced Ceramic X is currently generating about 0.06 per unit of risk. If you would invest 33,250 in Posiflex Technology on October 9, 2024 and sell it today you would earn a total of 2,700 from holding Posiflex Technology or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Posiflex Technology vs. Advanced Ceramic X
Performance |
| Timeline |
| Posiflex Technology |
| Advanced Ceramic X |
Posiflex Technology and Advanced Ceramic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Posiflex Technology and Advanced Ceramic
The main advantage of trading using opposite Posiflex Technology and Advanced Ceramic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Posiflex Technology position performs unexpectedly, Advanced Ceramic 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 Advanced Ceramic will offset losses from the drop in Advanced Ceramic's long position.| Posiflex Technology vs. Holy Stone Enterprise | Posiflex Technology vs. Walsin Technology Corp | Posiflex Technology vs. Yageo Corp | Posiflex Technology vs. HannStar Board Corp |
| Advanced Ceramic vs. Information Technology Total | Advanced Ceramic vs. Sesoda Corp | Advanced Ceramic vs. Arbor Technology | Advanced Ceramic vs. Quanta Storage |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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