Correlation Between Phison Electronics and Advantech
Can any of the company-specific risk be diversified away by investing in both Phison Electronics and Advantech 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 Phison Electronics and Advantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phison Electronics and Advantech Co, you can compare the effects of market volatilities on Phison Electronics and Advantech 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 Phison Electronics with a short position of Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phison Electronics and Advantech.
Diversification Opportunities for Phison Electronics and Advantech
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Phison and Advantech is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Phison Electronics and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech and Phison Electronics 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 Phison Electronics are associated (or correlated) with Advantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantech has no effect on the direction of Phison Electronics i.e., Phison Electronics and Advantech go up and down completely randomly.
Pair Corralation between Phison Electronics and Advantech
Assuming the 90 days trading horizon Phison Electronics is expected to under-perform the Advantech. In addition to that, Phison Electronics is 1.7 times more volatile than Advantech Co. It trades about -0.07 of its total potential returns per unit of risk. Advantech Co is currently generating about 0.22 per unit of volatility. If you would invest 32,000 in Advantech Co on August 31, 2024 and sell it today you would earn a total of 2,250 from holding Advantech Co or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phison Electronics vs. Advantech Co
Performance |
| Timeline |
| Phison Electronics |
| Advantech |
Phison Electronics and Advantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phison Electronics and Advantech
The main advantage of trading using opposite Phison Electronics and Advantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phison Electronics position performs unexpectedly, Advantech 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 Advantech will offset losses from the drop in Advantech's long position.| Phison Electronics vs. Syscom Computer Engineering | Phison Electronics vs. Voltronic Power Technology | Phison Electronics vs. Tehmag Foods | Phison Electronics vs. Great Computer |
| Advantech vs. Delta Electronics | Advantech vs. Quanta Computer | Advantech vs. Realtek Semiconductor Corp | Advantech vs. President Chain Store |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| CEOs Directory Screen CEOs from public companies around the world |