Correlation Between Advanced Power and Pan Jit
Can any of the company-specific risk be diversified away by investing in both Advanced Power and Pan Jit 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 Power and Pan Jit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Power Electronics and Pan Jit International, you can compare the effects of market volatilities on Advanced Power and Pan Jit 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 Power with a short position of Pan Jit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Power and Pan Jit.
Diversification Opportunities for Advanced Power and Pan Jit
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advanced and Pan is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Power Electronics and Pan Jit International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Jit International and Advanced Power 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 Power Electronics are associated (or correlated) with Pan Jit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Jit International has no effect on the direction of Advanced Power i.e., Advanced Power and Pan Jit go up and down completely randomly.
Pair Corralation between Advanced Power and Pan Jit
Assuming the 90 days trading horizon Advanced Power Electronics is expected to generate about the same return on investment as Pan Jit International. But, Advanced Power Electronics is 1.07 times less risky than Pan Jit. It trades about -0.01 of its potential returns per unit of risk. Pan Jit International is currently generating about -0.01 per unit of risk. If you would invest 5,980 in Pan Jit International on August 30, 2024 and sell it today you would lose (870.00) from holding Pan Jit International or give up 14.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Power Electronics vs. Pan Jit International
Performance |
| Timeline |
| Advanced Power Elect |
| Pan Jit International |
Advanced Power and Pan Jit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Power and Pan Jit
The main advantage of trading using opposite Advanced Power and Pan Jit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Power position performs unexpectedly, Pan Jit 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 Pan Jit will offset losses from the drop in Pan Jit's long position.| Advanced Power vs. Pan Jit International | Advanced Power vs. Global Mixed Mode Technology | Advanced Power vs. Sitronix Technology Corp | Advanced Power vs. Nuvoton Technology Corp |
| Pan Jit vs. Elan Microelectronics Corp | Pan Jit vs. Walsin Technology Corp | Pan Jit vs. Unimicron Technology Corp | Pan Jit vs. Visual Photonics Epitaxy |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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