Correlation Between Senao Networks and Advanced Ceramic
Can any of the company-specific risk be diversified away by investing in both Senao Networks and Advanced Ceramic 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 Senao Networks and Advanced Ceramic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senao Networks and Advanced Ceramic X, you can compare the effects of market volatilities on Senao Networks and Advanced Ceramic 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 Senao Networks with a short position of Advanced Ceramic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senao Networks and Advanced Ceramic.
Diversification Opportunities for Senao Networks and Advanced Ceramic
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Senao and Advanced is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Senao Networks and Advanced Ceramic X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Ceramic X and Senao Networks 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 Senao Networks are associated (or correlated) with Advanced Ceramic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Ceramic X has no effect on the direction of Senao Networks i.e., Senao Networks and Advanced Ceramic go up and down completely randomly.
Pair Corralation between Senao Networks and Advanced Ceramic
Assuming the 90 days trading horizon Senao Networks is expected to generate 61.72 times less return on investment than Advanced Ceramic. In addition to that, Senao Networks is 1.37 times more volatile than Advanced Ceramic X. It trades about 0.0 of its total potential returns per unit of risk. Advanced Ceramic X is currently generating about 0.13 per unit of volatility. If you would invest 16,850 in Advanced Ceramic X on September 25, 2024 and sell it today you would earn a total of 1,150 from holding Advanced Ceramic X or generate 6.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Senao Networks vs. Advanced Ceramic X
Performance |
Timeline |
Senao Networks |
Advanced Ceramic X |
Senao Networks and Advanced Ceramic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Senao Networks and Advanced Ceramic
The main advantage of trading using opposite Senao Networks and Advanced Ceramic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senao Networks position performs unexpectedly, Advanced Ceramic 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 Advanced Ceramic will offset losses from the drop in Advanced Ceramic's long position.Senao Networks vs. Accton Technology Corp | Senao Networks vs. HTC Corp | Senao Networks vs. Wistron NeWeb Corp | Senao Networks vs. Arcadyan Technology Corp |
Advanced Ceramic vs. Accton Technology Corp | Advanced Ceramic vs. HTC Corp | Advanced Ceramic vs. Wistron NeWeb Corp | Advanced Ceramic vs. Arcadyan Technology Corp |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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