Correlation Between Advantech and Great Taipei
Can any of the company-specific risk be diversified away by investing in both Advantech and Great Taipei 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 Advantech and Great Taipei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantech Co and Great Taipei Gas, you can compare the effects of market volatilities on Advantech and Great Taipei 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 Advantech with a short position of Great Taipei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantech and Great Taipei.
Diversification Opportunities for Advantech and Great Taipei
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Advantech and Great is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Advantech Co and Great Taipei Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Taipei Gas and Advantech 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 Advantech Co are associated (or correlated) with Great Taipei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Taipei Gas has no effect on the direction of Advantech i.e., Advantech and Great Taipei go up and down completely randomly.
Pair Corralation between Advantech and Great Taipei
Assuming the 90 days trading horizon Advantech Co is expected to generate 7.09 times more return on investment than Great Taipei. However, Advantech is 7.09 times more volatile than Great Taipei Gas. It trades about 0.1 of its potential returns per unit of risk. Great Taipei Gas is currently generating about -0.06 per unit of risk. If you would invest 32,350 in Advantech Co on September 12, 2024 and sell it today you would earn a total of 3,000 from holding Advantech Co or generate 9.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
Advantech Co vs. Great Taipei Gas
Performance |
Timeline |
Advantech |
Great Taipei Gas |
Advantech and Great Taipei Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Advantech and Great Taipei
The main advantage of trading using opposite Advantech and Great Taipei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantech position performs unexpectedly, Great Taipei 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 Great Taipei will offset losses from the drop in Great Taipei's long position.Advantech vs. Delta Electronics | Advantech vs. Quanta Computer | Advantech vs. Realtek Semiconductor Corp | Advantech vs. President Chain Store |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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