Correlation Between Adaptive Plasma and Shinsung Delta

Can any of the company-specific risk be diversified away by investing in both Adaptive Plasma and Shinsung Delta 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 Adaptive Plasma and Shinsung Delta into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Adaptive Plasma Technology and Shinsung Delta Tech, you can compare the effects of market volatilities on Adaptive Plasma and Shinsung Delta 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 Adaptive Plasma with a short position of Shinsung Delta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaptive Plasma and Shinsung Delta.

Diversification Opportunities for Adaptive Plasma and Shinsung Delta

-0.86

Correlation Coefficient

Adaptive Plasma  Shinsung Delta

Pay attention - limited upside

The 3 months correlation between Adaptive and Shinsung is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Adaptive Plasma Technology and Shinsung Delta Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsung Delta Tech and Adaptive Plasma 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 Adaptive Plasma Technology are associated (or correlated) with Shinsung Delta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsung Delta Tech has no effect on the direction of Adaptive Plasma i.e., Adaptive Plasma and Shinsung Delta go up and down completely randomly.

Pair Corralation between Adaptive Plasma and Shinsung Delta

Assuming the 90 days trading horizon Adaptive Plasma Technology is expected to generate 1.01 times more return on investment than Shinsung Delta. However, Adaptive Plasma is 1.01 times more volatile than Shinsung Delta Tech. It trades about 0.28 of its potential returns per unit of risk. Shinsung Delta Tech is currently generating about -0.28 per unit of risk. If you would invest  684,000  in Adaptive Plasma Technology on December 26, 2024 and sell it today you would earn a total of  528,000  from holding Adaptive Plasma Technology or generate 77.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.28%
Values	Daily Returns

Adaptive Plasma Technology  vs.  Shinsung Delta Tech

Adaptive Plasma Tech

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Adaptive Plasma Technology are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Adaptive Plasma sustained solid returns over the last few months and may actually be approaching a breakup point.

Shinsung Delta Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shinsung Delta Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Adaptive Plasma and Shinsung Delta

The main advantage of trading using opposite Adaptive Plasma and Shinsung Delta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaptive Plasma position performs unexpectedly, Shinsung Delta 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 Shinsung Delta will offset losses from the drop in Shinsung Delta's long position.

The idea behind Adaptive Plasma Technology and Shinsung Delta Tech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.