Correlation Between ADLINK Technology and Kingstate Electronics
Can any of the company-specific risk be diversified away by investing in both ADLINK Technology and Kingstate Electronics 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 ADLINK Technology and Kingstate Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADLINK Technology and Kingstate Electronics, you can compare the effects of market volatilities on ADLINK Technology and Kingstate Electronics 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 ADLINK Technology with a short position of Kingstate Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADLINK Technology and Kingstate Electronics.
Diversification Opportunities for ADLINK Technology and Kingstate Electronics
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ADLINK and Kingstate is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding ADLINK Technology and Kingstate Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingstate Electronics and ADLINK 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 ADLINK Technology are associated (or correlated) with Kingstate Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingstate Electronics has no effect on the direction of ADLINK Technology i.e., ADLINK Technology and Kingstate Electronics go up and down completely randomly.
Pair Corralation between ADLINK Technology and Kingstate Electronics
Assuming the 90 days trading horizon ADLINK Technology is expected to generate 1.41 times more return on investment than Kingstate Electronics. However, ADLINK Technology is 1.41 times more volatile than Kingstate Electronics. It trades about 0.09 of its potential returns per unit of risk. Kingstate Electronics is currently generating about -0.16 per unit of risk. If you would invest 6,890 in ADLINK Technology on September 24, 2024 and sell it today you would earn a total of 670.00 from holding ADLINK Technology or generate 9.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.46% |
Values | Daily Returns |
ADLINK Technology vs. Kingstate Electronics
Performance |
Timeline |
ADLINK Technology |
Kingstate Electronics |
ADLINK Technology and Kingstate Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ADLINK Technology and Kingstate Electronics
The main advantage of trading using opposite ADLINK Technology and Kingstate Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADLINK Technology position performs unexpectedly, Kingstate Electronics 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 Kingstate Electronics will offset losses from the drop in Kingstate Electronics' long position.ADLINK Technology vs. Century Wind Power | ADLINK Technology vs. Green World Fintech | ADLINK Technology vs. Ingentec | ADLINK Technology vs. Chaheng Precision Co |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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