Correlation Between Ju Teng and Advantech

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

By analyzing existing cross correlation between Ju Teng International and Advantech Co, you can compare the effects of market volatilities on Ju Teng and Advantech 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 Ju Teng with a short position of Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ju Teng and Advantech.

Diversification Opportunities for Ju Teng and Advantech

-0.6

Correlation Coefficient

Ju Teng  Advantech

Excellent diversification

The 3 months correlation between 9136 and Advantech is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ju Teng International and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech and Ju Teng 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 Ju Teng International are associated (or correlated) with Advantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantech has no effect on the direction of Ju Teng i.e., Ju Teng and Advantech go up and down completely randomly.

Pair Corralation between Ju Teng and Advantech

Assuming the 90 days trading horizon Ju Teng is expected to generate 11.65 times less return on investment than Advantech. But when comparing it to its historical volatility, Ju Teng International is 1.47 times less risky than Advantech. It trades about 0.01 of its potential returns per unit of risk. Advantech Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  31,850  in Advantech Co on October 9, 2024 and sell it today you would earn a total of  3,550  from holding Advantech Co or generate 11.15% return on investment over 90 days.

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

Ju Teng International  vs.  Advantech Co

Ju Teng International

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ju Teng International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Ju Teng is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Advantech

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Advantech Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Advantech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Ju Teng and Advantech

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

The idea behind Ju Teng International and Advantech 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.