Correlation Between Advanced Energy and Xintec
Can any of the company-specific risk be diversified away by investing in both Advanced Energy and Xintec 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 Advanced Energy and Xintec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Energy Solution and Xintec, you can compare the effects of market volatilities on Advanced Energy and Xintec 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 Advanced Energy with a short position of Xintec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Energy and Xintec.
Diversification Opportunities for Advanced Energy and Xintec
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advanced and Xintec is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Energy Solution and Xintec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xintec and Advanced Energy 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 Advanced Energy Solution are associated (or correlated) with Xintec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xintec has no effect on the direction of Advanced Energy i.e., Advanced Energy and Xintec go up and down completely randomly.
Pair Corralation between Advanced Energy and Xintec
Assuming the 90 days trading horizon Advanced Energy Solution is expected to generate 1.53 times more return on investment than Xintec. However, Advanced Energy is 1.53 times more volatile than Xintec. It trades about 0.37 of its potential returns per unit of risk. Xintec is currently generating about -0.05 per unit of risk. If you would invest 55,200 in Advanced Energy Solution on October 7, 2024 and sell it today you would earn a total of 50,800 from holding Advanced Energy Solution or generate 92.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Advanced Energy Solution vs. Xintec
Performance |
Timeline |
Advanced Energy Solution |
Xintec |
Advanced Energy and Xintec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Advanced Energy and Xintec
The main advantage of trading using opposite Advanced Energy and Xintec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Energy position performs unexpectedly, Xintec 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 Xintec will offset losses from the drop in Xintec's long position.Advanced Energy vs. Nan Ya Printed | Advanced Energy vs. Lotes Co | Advanced Energy vs. eMemory Technology | Advanced Energy vs. Alchip Technologies |
Xintec vs. MediaTek | Xintec vs. Holiday Entertainment Co | Xintec vs. Shan Loong Transportation Co | Xintec vs. Lian Hwa Foods |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |