Correlation Between Elite Semiconductor and Ardentec

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

By analyzing existing cross correlation between Elite Semiconductor Memory and Ardentec, you can compare the effects of market volatilities on Elite Semiconductor and Ardentec 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 Elite Semiconductor with a short position of Ardentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Semiconductor and Ardentec.

Diversification Opportunities for Elite Semiconductor and Ardentec

-0.37

Correlation Coefficient

Elite Semiconductor  Ardentec

Very good diversification

The 3 months correlation between Elite and Ardentec is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Elite Semiconductor Memory and Ardentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardentec and Elite Semiconductor 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 Elite Semiconductor Memory are associated (or correlated) with Ardentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardentec has no effect on the direction of Elite Semiconductor i.e., Elite Semiconductor and Ardentec go up and down completely randomly.

Pair Corralation between Elite Semiconductor and Ardentec

If you would invest (100.00) in Ardentec on October 25, 2024 and sell it today you would earn a total of  100.00  from holding Ardentec or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Elite Semiconductor Memory  vs.  Ardentec

Elite Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elite Semiconductor Memory 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.

Ardentec

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Ardentec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, Ardentec showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elite Semiconductor and Ardentec

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

The idea behind Elite Semiconductor Memory and Ardentec 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.