Correlation Between Advancetek Enterprise and Champion Building
Can any of the company-specific risk be diversified away by investing in both Advancetek Enterprise and Champion Building 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 Champion Building 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 Champion Building Materials, you can compare the effects of market volatilities on Advancetek Enterprise and Champion Building 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 Champion Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advancetek Enterprise and Champion Building.
Diversification Opportunities for Advancetek Enterprise and Champion Building
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advancetek and Champion is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Advancetek Enterprise Co and Champion Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Building 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 Champion Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Building has no effect on the direction of Advancetek Enterprise i.e., Advancetek Enterprise and Champion Building go up and down completely randomly.
Pair Corralation between Advancetek Enterprise and Champion Building
Assuming the 90 days trading horizon Advancetek Enterprise Co is expected to generate 1.34 times more return on investment than Champion Building. However, Advancetek Enterprise is 1.34 times more volatile than Champion Building Materials. It trades about 0.15 of its potential returns per unit of risk. Champion Building Materials is currently generating about -0.11 per unit of risk. If you would invest 6,230 in Advancetek Enterprise Co on September 8, 2024 and sell it today you would earn a total of 1,970 from holding Advancetek Enterprise Co or generate 31.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Advancetek Enterprise Co vs. Champion Building Materials
Performance |
Timeline |
Advancetek Enterprise |
Champion Building |
Advancetek Enterprise and Champion Building Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Advancetek Enterprise and Champion Building
The main advantage of trading using opposite Advancetek Enterprise and Champion Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advancetek Enterprise position performs unexpectedly, Champion Building 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 Champion Building will offset losses from the drop in Champion Building's long position.Advancetek Enterprise vs. HUA YU LIEN | Advancetek Enterprise vs. Shinkong Synthetic Fiber | Advancetek Enterprise vs. Lealea Enterprise Co | Advancetek Enterprise vs. Shinkong Textile Co |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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