Correlation Between Adata Technology and Grand Plastic

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

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

Diversification Opportunities for Adata Technology and Grand Plastic

0.5

Correlation Coefficient

Adata Technology  Grand Plastic

Very weak diversification

The 3 months correlation between Adata and Grand is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Adata Technology Co and Grand Plastic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Plastic Technology and Adata Technology 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 Adata Technology Co are associated (or correlated) with Grand Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Plastic Technology has no effect on the direction of Adata Technology i.e., Adata Technology and Grand Plastic go up and down completely randomly.

Pair Corralation between Adata Technology and Grand Plastic

Assuming the 90 days trading horizon Adata Technology Co is expected to generate 0.42 times more return on investment than Grand Plastic. However, Adata Technology Co is 2.36 times less risky than Grand Plastic. It trades about -0.2 of its potential returns per unit of risk. Grand Plastic Technology is currently generating about -0.16 per unit of risk. If you would invest  8,280  in Adata Technology Co on October 12, 2024 and sell it today you would lose (550.00) from holding Adata Technology Co or give up 6.64% of portfolio value over 90 days.

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

Adata Technology Co  vs.  Grand Plastic Technology

Adata Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adata Technology 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.

Grand Plastic Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grand Plastic Technology 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 Adata Technology and Grand Plastic

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

The idea behind Adata Technology Co and Grand Plastic Technology 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.