Correlation Between Addentax Group and Landstar System

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

By analyzing existing cross correlation between Addentax Group Corp and Landstar System, you can compare the effects of market volatilities on Addentax Group and Landstar System 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 Addentax Group with a short position of Landstar System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addentax Group and Landstar System.

Diversification Opportunities for Addentax Group and Landstar System

-0.56

Correlation Coefficient

Addentax Group  Landstar System

Excellent diversification

The 3 months correlation between Addentax and Landstar is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Addentax Group Corp and Landstar System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Landstar System and Addentax Group 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 Addentax Group Corp are associated (or correlated) with Landstar System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Landstar System has no effect on the direction of Addentax Group i.e., Addentax Group and Landstar System go up and down completely randomly.

Pair Corralation between Addentax Group and Landstar System

Given the investment horizon of 90 days Addentax Group Corp is expected to generate 4.48 times more return on investment than Landstar System. However, Addentax Group is 4.48 times more volatile than Landstar System. It trades about 0.07 of its potential returns per unit of risk. Landstar System is currently generating about -0.15 per unit of risk. If you would invest  69.00  in Addentax Group Corp on December 29, 2024 and sell it today you would earn a total of  12.00  from holding Addentax Group Corp or generate 17.39% return on investment over 90 days.

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

Addentax Group Corp  vs.  Landstar System

Addentax Group Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Addentax Group Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Addentax Group reported solid returns over the last few months and may actually be approaching a breakup point.

Landstar System

Risk-Adjusted Performance

Very Weak

Over the last 90 days Landstar System has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Addentax Group and Landstar System

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

The idea behind Addentax Group Corp and Landstar System 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.