Correlation Between Advancetek Enterprise and New Era

Can any of the company-specific risk be diversified away by investing in both Advancetek Enterprise and New Era 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 New Era 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 New Era Electronics, you can compare the effects of market volatilities on Advancetek Enterprise and New Era 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 New Era. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advancetek Enterprise and New Era.

Diversification Opportunities for Advancetek Enterprise and New Era

-0.53

Correlation Coefficient

Advancetek Enterprise  New Era

Excellent diversification

The 3 months correlation between Advancetek and New is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Advancetek Enterprise Co and New Era Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Era Electronics 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 New Era. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Era Electronics has no effect on the direction of Advancetek Enterprise i.e., Advancetek Enterprise and New Era go up and down completely randomly.

Pair Corralation between Advancetek Enterprise and New Era

Assuming the 90 days trading horizon Advancetek Enterprise Co is expected to under-perform the New Era. In addition to that, Advancetek Enterprise is 1.03 times more volatile than New Era Electronics. It trades about -0.27 of its total potential returns per unit of risk. New Era Electronics is currently generating about -0.03 per unit of volatility. If you would invest  11,650  in New Era Electronics on October 9, 2024 and sell it today you would lose (250.00) from holding New Era Electronics or give up 2.15% of portfolio value over 90 days.

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

Advancetek Enterprise Co  vs.  New Era Electronics

Advancetek Enterprise

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Advancetek Enterprise Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Advancetek Enterprise may actually be approaching a critical reversion point that can send shares even higher in February 2025.

New Era Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New Era Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Advancetek Enterprise and New Era

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

The idea behind Advancetek Enterprise Co and New Era Electronics 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.