Correlation Between CooTek Cayman and Adcore

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

By analyzing existing cross correlation between CooTek Cayman and Adcore Inc, you can compare the effects of market volatilities on CooTek Cayman and Adcore 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 CooTek Cayman with a short position of Adcore. Check out your portfolio center. Please also check ongoing floating volatility patterns of CooTek Cayman and Adcore.

Diversification Opportunities for CooTek Cayman and Adcore

0.15

Correlation Coefficient

CooTek Cayman  Adcore

Average diversification

The 3 months correlation between CooTek and Adcore is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding CooTek Cayman and Adcore Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adcore Inc and CooTek Cayman 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 CooTek Cayman are associated (or correlated) with Adcore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adcore Inc has no effect on the direction of CooTek Cayman i.e., CooTek Cayman and Adcore go up and down completely randomly.

Pair Corralation between CooTek Cayman and Adcore

Assuming the 90 days horizon CooTek Cayman is expected to generate 4.93 times more return on investment than Adcore. However, CooTek Cayman is 4.93 times more volatile than Adcore Inc. It trades about 0.24 of its potential returns per unit of risk. Adcore Inc is currently generating about -0.01 per unit of risk. If you would invest  13.00  in CooTek Cayman on September 3, 2024 and sell it today you would earn a total of  28.00  from holding CooTek Cayman or generate 215.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	8.28%
Values	Daily Returns

CooTek Cayman  vs.  Adcore Inc

CooTek Cayman

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CooTek Cayman has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, CooTek Cayman is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Adcore Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adcore Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CooTek Cayman and Adcore

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

The idea behind CooTek Cayman and Adcore Inc 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.