Correlation Between Nak Sealing and Advantech
Can any of the company-specific risk be diversified away by investing in both Nak Sealing 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 Nak Sealing and Advantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nak Sealing Technologies and Advantech Co, you can compare the effects of market volatilities on Nak Sealing 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 Nak Sealing with a short position of Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nak Sealing and Advantech.
Diversification Opportunities for Nak Sealing and Advantech
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nak and Advantech is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nak Sealing Technologies and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech and Nak Sealing 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 Nak Sealing Technologies 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 Nak Sealing i.e., Nak Sealing and Advantech go up and down completely randomly.
Pair Corralation between Nak Sealing and Advantech
Assuming the 90 days trading horizon Nak Sealing is expected to generate 5.07 times less return on investment than Advantech. But when comparing it to its historical volatility, Nak Sealing Technologies is 1.48 times less risky than Advantech. It trades about 0.04 of its potential returns per unit of risk. Advantech Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 32,000 in Advantech Co on September 1, 2024 and sell it today you would earn a total of 1,550 from holding Advantech Co or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nak Sealing Technologies vs. Advantech Co
Performance |
| Timeline |
| Nak Sealing Technologies |
| Advantech |
Nak Sealing and Advantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nak Sealing and Advantech
The main advantage of trading using opposite Nak Sealing and Advantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nak Sealing 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.| Nak Sealing vs. CHC Resources Corp | Nak Sealing vs. Taiwan Secom Co | Nak Sealing vs. Taiwan Shin Kong | Nak Sealing vs. Yulon Finance Corp |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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