Correlation Between Advanced Energy and Hollysys Automation
Can any of the company-specific risk be diversified away by investing in both Advanced Energy and Hollysys Automation 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 Energy and Hollysys Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Energy Industries and Hollysys Automation Technologies, you can compare the effects of market volatilities on Advanced Energy and Hollysys Automation 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 Energy with a short position of Hollysys Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Energy and Hollysys Automation.
Diversification Opportunities for Advanced Energy and Hollysys Automation
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Advanced and Hollysys is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Energy Industries and Hollysys Automation Technologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollysys Automation and Advanced Energy 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 Energy Industries are associated (or correlated) with Hollysys Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollysys Automation has no effect on the direction of Advanced Energy i.e., Advanced Energy and Hollysys Automation go up and down completely randomly.
Pair Corralation between Advanced Energy and Hollysys Automation
If you would invest 10,220 in Advanced Energy Industries on November 9, 2024 and sell it today you would earn a total of 1,090 from holding Advanced Energy Industries or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Advanced Energy Industries vs. Hollysys Automation Technologi
Performance |
| Timeline |
| Advanced Energy Indu |
| Hollysys Automation |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Advanced Energy and Hollysys Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Energy and Hollysys Automation
The main advantage of trading using opposite Advanced Energy and Hollysys Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Energy position performs unexpectedly, Hollysys Automation 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 Hollysys Automation will offset losses from the drop in Hollysys Automation's long position.| Advanced Energy vs. MKS Instruments | Advanced Energy vs. Axcelis Technologies | Advanced Energy vs. Entegris | Advanced Energy vs. Cohu Inc |
| Hollysys Automation vs. Huazhu Group | Hollysys Automation vs. VNET Group DRC | Hollysys Automation vs. Noah Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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