Correlation Between Pontex Polyblend and ADLINK Technology
Can any of the company-specific risk be diversified away by investing in both Pontex Polyblend and ADLINK 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 Pontex Polyblend and ADLINK Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pontex Polyblend CoLtd and ADLINK Technology, you can compare the effects of market volatilities on Pontex Polyblend and ADLINK 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 Pontex Polyblend with a short position of ADLINK Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pontex Polyblend and ADLINK Technology.
Diversification Opportunities for Pontex Polyblend and ADLINK Technology
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pontex and ADLINK is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Pontex Polyblend CoLtd and ADLINK Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADLINK Technology and Pontex Polyblend 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 Pontex Polyblend CoLtd are associated (or correlated) with ADLINK Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADLINK Technology has no effect on the direction of Pontex Polyblend i.e., Pontex Polyblend and ADLINK Technology go up and down completely randomly.
Pair Corralation between Pontex Polyblend and ADLINK Technology
Assuming the 90 days trading horizon Pontex Polyblend CoLtd is expected to generate 1.45 times more return on investment than ADLINK Technology. However, Pontex Polyblend is 1.45 times more volatile than ADLINK Technology. It trades about 0.12 of its potential returns per unit of risk. ADLINK Technology is currently generating about 0.07 per unit of risk. If you would invest 2,020 in Pontex Polyblend CoLtd on August 31, 2024 and sell it today you would earn a total of 170.00 from holding Pontex Polyblend CoLtd or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pontex Polyblend CoLtd vs. ADLINK Technology
Performance |
| Timeline |
| Pontex Polyblend CoLtd |
| ADLINK Technology |
Pontex Polyblend and ADLINK Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pontex Polyblend and ADLINK Technology
The main advantage of trading using opposite Pontex Polyblend and ADLINK Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pontex Polyblend position performs unexpectedly, ADLINK 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 ADLINK Technology will offset losses from the drop in ADLINK Technology's long position.| Pontex Polyblend vs. Cheng Shin Rubber | Pontex Polyblend vs. Nankang Rubber Tire | Pontex Polyblend vs. USI Corp | Pontex Polyblend vs. Asia Polymer Corp |
| ADLINK Technology vs. Hsin Kuang Steel | ADLINK Technology vs. Chief Telecom | ADLINK Technology vs. Ever Clear Environmental Eng | ADLINK Technology vs. Mayer Steel Pipe |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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