Correlation Between ADEIA P and Hitek Global
Can any of the company-specific risk be diversified away by investing in both ADEIA P and Hitek Global 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 ADEIA P and Hitek Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADEIA P and Hitek Global Ordinary, you can compare the effects of market volatilities on ADEIA P and Hitek Global 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 ADEIA P with a short position of Hitek Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADEIA P and Hitek Global.
Diversification Opportunities for ADEIA P and Hitek Global
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between ADEIA and Hitek is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ADEIA P and Hitek Global Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitek Global Ordinary and ADEIA P 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 ADEIA P are associated (or correlated) with Hitek Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitek Global Ordinary has no effect on the direction of ADEIA P i.e., ADEIA P and Hitek Global go up and down completely randomly.
Pair Corralation between ADEIA P and Hitek Global
Given the investment horizon of 90 days ADEIA P is expected to generate 2.53 times more return on investment than Hitek Global. However, ADEIA P is 2.53 times more volatile than Hitek Global Ordinary. It trades about -0.01 of its potential returns per unit of risk. Hitek Global Ordinary is currently generating about -0.04 per unit of risk. If you would invest 1,258 in ADEIA P on August 27, 2024 and sell it today you would lose (53.00) from holding ADEIA P or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADEIA P vs. Hitek Global Ordinary
Performance |
| Timeline |
| ADEIA P |
| Hitek Global Ordinary |
ADEIA P and Hitek Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADEIA P and Hitek Global
The main advantage of trading using opposite ADEIA P and Hitek Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADEIA P position performs unexpectedly, Hitek Global 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 Hitek Global will offset losses from the drop in Hitek Global's long position.| ADEIA P vs. Enfusion | ADEIA P vs. Zeta Global Holdings | ADEIA P vs. Clearwater Analytics Holdings | ADEIA P vs. ON24 Inc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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