Correlation Between Advancetek Enterprise and SanDi Properties

Can any of the company-specific risk be diversified away by investing in both Advancetek Enterprise and SanDi Properties 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 Advancetek Enterprise and SanDi Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Advancetek Enterprise Co and SanDi Properties Co, you can compare the effects of market volatilities on Advancetek Enterprise and SanDi Properties 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 Advancetek Enterprise with a short position of SanDi Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advancetek Enterprise and SanDi Properties.

Diversification Opportunities for Advancetek Enterprise and SanDi Properties

-0.42

Correlation Coefficient

Advancetek Enterprise  SanDi Properties

Very good diversification

The 3 months correlation between Advancetek and SanDi is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Advancetek Enterprise Co and SanDi Properties Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SanDi Properties and Advancetek Enterprise 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 Advancetek Enterprise Co are associated (or correlated) with SanDi Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SanDi Properties has no effect on the direction of Advancetek Enterprise i.e., Advancetek Enterprise and SanDi Properties go up and down completely randomly.

Pair Corralation between Advancetek Enterprise and SanDi Properties

Assuming the 90 days trading horizon Advancetek Enterprise Co is expected to generate 1.13 times more return on investment than SanDi Properties. However, Advancetek Enterprise is 1.13 times more volatile than SanDi Properties Co. It trades about 0.17 of its potential returns per unit of risk. SanDi Properties Co is currently generating about -0.06 per unit of risk. If you would invest  6,080  in Advancetek Enterprise Co on September 12, 2024 and sell it today you would earn a total of  2,270  from holding Advancetek Enterprise Co or generate 37.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Advancetek Enterprise Co  vs.  SanDi Properties Co

Advancetek Enterprise

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Advancetek Enterprise Co are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Advancetek Enterprise showed solid returns over the last few months and may actually be approaching a breakup point.

SanDi Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SanDi Properties Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Advancetek Enterprise and SanDi Properties

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

The idea behind Advancetek Enterprise Co and SanDi Properties Co 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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.