Correlation Between Posiflex Technology and Andes Technology
Can any of the company-specific risk be diversified away by investing in both Posiflex Technology and Andes 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 Posiflex Technology and Andes Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Posiflex Technology and Andes Technology Corp, you can compare the effects of market volatilities on Posiflex Technology and Andes 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 Posiflex Technology with a short position of Andes Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Posiflex Technology and Andes Technology.
Diversification Opportunities for Posiflex Technology and Andes Technology
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Posiflex and Andes is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Posiflex Technology and Andes Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andes Technology Corp 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 Andes Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andes Technology Corp has no effect on the direction of Posiflex Technology i.e., Posiflex Technology and Andes Technology go up and down completely randomly.
Pair Corralation between Posiflex Technology and Andes Technology
Assuming the 90 days trading horizon Posiflex Technology is expected to generate 1.82 times more return on investment than Andes Technology. However, Posiflex Technology is 1.82 times more volatile than Andes Technology Corp. It trades about 0.48 of its potential returns per unit of risk. Andes Technology Corp is currently generating about -0.14 per unit of risk. If you would invest 21,700 in Posiflex Technology on August 28, 2024 and sell it today you would earn a total of 9,650 from holding Posiflex Technology or generate 44.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Posiflex Technology vs. Andes Technology Corp
Performance |
| Timeline |
| Posiflex Technology |
| Andes Technology Corp |
Posiflex Technology and Andes Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Posiflex Technology and Andes Technology
The main advantage of trading using opposite Posiflex Technology and Andes Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Posiflex Technology position performs unexpectedly, Andes 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 Andes Technology will offset losses from the drop in Andes Technology's long position.| Posiflex Technology vs. Novatek Microelectronics Corp | Posiflex Technology vs. United Microelectronics |
| Andes Technology vs. Sheng Yu Steel | Andes Technology vs. Chicony Power Technology | Andes Technology vs. Sunnic Technology Merchandise | Andes Technology vs. Posiflex Technology |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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