Correlation Between Advanced Power and Excelliance MOS
Can any of the company-specific risk be diversified away by investing in both Advanced Power and Excelliance MOS 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 Excelliance MOS 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 Excelliance MOS, you can compare the effects of market volatilities on Advanced Power and Excelliance MOS 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 Excelliance MOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Power and Excelliance MOS.
Diversification Opportunities for Advanced Power and Excelliance MOS
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advanced and Excelliance is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Power Electronics and Excelliance MOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelliance MOS 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 Excelliance MOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelliance MOS has no effect on the direction of Advanced Power i.e., Advanced Power and Excelliance MOS go up and down completely randomly.
Pair Corralation between Advanced Power and Excelliance MOS
Assuming the 90 days trading horizon Advanced Power Electronics is expected to generate 1.1 times more return on investment than Excelliance MOS. However, Advanced Power is 1.1 times more volatile than Excelliance MOS. It trades about -0.01 of its potential returns per unit of risk. Excelliance MOS is currently generating about -0.02 per unit of risk. If you would invest 10,700 in Advanced Power Electronics on August 30, 2024 and sell it today you would lose (1,450) from holding Advanced Power Electronics or give up 13.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Power Electronics vs. Excelliance MOS
Performance |
| Timeline |
| Advanced Power Elect |
| Excelliance MOS |
Advanced Power and Excelliance MOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Power and Excelliance MOS
The main advantage of trading using opposite Advanced Power and Excelliance MOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Power position performs unexpectedly, Excelliance MOS 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 Excelliance MOS will offset losses from the drop in Excelliance MOS'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 |
| Excelliance MOS vs. Sinopower Semiconductor | Excelliance MOS vs. Niko Semiconductor Co | Excelliance MOS vs. Advanced Power Electronics | Excelliance MOS vs. Anpec Electronics |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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