Correlation Between Preformed Line and ADS TEC
Can any of the company-specific risk be diversified away by investing in both Preformed Line and ADS TEC 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 Preformed Line and ADS TEC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Preformed Line Products and ADS TEC ENERGY PLC, you can compare the effects of market volatilities on Preformed Line and ADS TEC 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 Preformed Line with a short position of ADS TEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Preformed Line and ADS TEC.
Diversification Opportunities for Preformed Line and ADS TEC
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Preformed and ADS is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Preformed Line Products and ADS TEC ENERGY PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADS TEC ENERGY and Preformed Line 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 Preformed Line Products are associated (or correlated) with ADS TEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADS TEC ENERGY has no effect on the direction of Preformed Line i.e., Preformed Line and ADS TEC go up and down completely randomly.
Pair Corralation between Preformed Line and ADS TEC
Given the investment horizon of 90 days Preformed Line Products is expected to generate 0.7 times more return on investment than ADS TEC. However, Preformed Line Products is 1.43 times less risky than ADS TEC. It trades about 0.14 of its potential returns per unit of risk. ADS TEC ENERGY PLC is currently generating about 0.01 per unit of risk. If you would invest 12,600 in Preformed Line Products on September 2, 2024 and sell it today you would earn a total of 1,002 from holding Preformed Line Products or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Preformed Line Products vs. ADS TEC ENERGY PLC
Performance |
| Timeline |
| Preformed Line Products |
| ADS TEC ENERGY |
Preformed Line and ADS TEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Preformed Line and ADS TEC
The main advantage of trading using opposite Preformed Line and ADS TEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Preformed Line position performs unexpectedly, ADS TEC 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 ADS TEC will offset losses from the drop in ADS TEC's long position.| Preformed Line vs. Kimball Electronics | Preformed Line vs. nVent Electric PLC | Preformed Line vs. Espey Mfg Electronics | Preformed Line vs. Hubbell |
| ADS TEC vs. Energizer Holdings | ADS TEC vs. Acuity Brands | ADS TEC vs. Espey Mfg Electronics | ADS TEC vs. Preformed Line Products |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |