Correlation Between ADLINK Technology and Sirtec International

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

By analyzing existing cross correlation between ADLINK Technology and Sirtec International Co, you can compare the effects of market volatilities on ADLINK Technology and Sirtec International 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 Sirtec International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADLINK Technology and Sirtec International.

Diversification Opportunities for ADLINK Technology and Sirtec International

0.1

Correlation Coefficient

ADLINK Technology  Sirtec International

Average diversification

The 3 months correlation between ADLINK and Sirtec is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding ADLINK Technology and Sirtec International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sirtec International 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 Sirtec International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sirtec International has no effect on the direction of ADLINK Technology i.e., ADLINK Technology and Sirtec International go up and down completely randomly.

Pair Corralation between ADLINK Technology and Sirtec International

Assuming the 90 days trading horizon ADLINK Technology is expected to generate 4.06 times more return on investment than Sirtec International. However, ADLINK Technology is 4.06 times more volatile than Sirtec International Co. It trades about 0.09 of its potential returns per unit of risk. Sirtec International Co is currently generating about 0.07 per unit of risk. If you would invest  7,560  in ADLINK Technology on December 22, 2024 and sell it today you would earn a total of  1,130  from holding ADLINK Technology or generate 14.95% return on investment over 90 days.

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

ADLINK Technology  vs.  Sirtec International Co

ADLINK Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ADLINK Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, ADLINK Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Sirtec International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sirtec International Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Sirtec International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with ADLINK Technology and Sirtec International

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

The idea behind ADLINK Technology and Sirtec International 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.