Correlation Between New Advanced and V Tac

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

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

Diversification Opportunities for New Advanced and V Tac

0.19

Correlation Coefficient

New Advanced  V Tac

Average diversification

The 3 months correlation between New and 6229 is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding New Advanced Electronics and V Tac Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V Tac Technology and New Advanced 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 New Advanced Electronics are associated (or correlated) with V Tac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V Tac Technology has no effect on the direction of New Advanced i.e., New Advanced and V Tac go up and down completely randomly.

Pair Corralation between New Advanced and V Tac

Assuming the 90 days trading horizon New Advanced Electronics is expected to generate 1.69 times more return on investment than V Tac. However, New Advanced is 1.69 times more volatile than V Tac Technology Co. It trades about 0.1 of its potential returns per unit of risk. V Tac Technology Co is currently generating about -0.08 per unit of risk. If you would invest  5,330  in New Advanced Electronics on December 28, 2024 and sell it today you would earn a total of  650.00  from holding New Advanced Electronics or generate 12.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.21%
Values	Daily Returns

New Advanced Electronics  vs.  V Tac Technology Co

New Advanced Electronics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in New Advanced Electronics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, New Advanced showed solid returns over the last few months and may actually be approaching a breakup point.

V Tac Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days V Tac 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.

Pair Trading with New Advanced and V Tac

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

The idea behind New Advanced Electronics and V Tac Technology Co 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.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.