Correlation Between Advancetek Enterprise and Asia Tech

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

By analyzing existing cross correlation between Advancetek Enterprise Co and Asia Tech Image, you can compare the effects of market volatilities on Advancetek Enterprise and Asia Tech 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 Advancetek Enterprise with a short position of Asia Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advancetek Enterprise and Asia Tech.

Diversification Opportunities for Advancetek Enterprise and Asia Tech

-0.56

Correlation Coefficient

Advancetek Enterprise  Asia Tech

Excellent diversification

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

Pair Corralation between Advancetek Enterprise and Asia Tech

Assuming the 90 days trading horizon Advancetek Enterprise Co is expected to generate 1.19 times more return on investment than Asia Tech. However, Advancetek Enterprise is 1.19 times more volatile than Asia Tech Image. It trades about 0.03 of its potential returns per unit of risk. Asia Tech Image is currently generating about 0.01 per unit of risk. If you would invest  6,840  in Advancetek Enterprise Co on September 26, 2024 and sell it today you would earn a total of  190.00  from holding Advancetek Enterprise Co or generate 2.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Advancetek Enterprise Co  vs.  Asia Tech Image

Advancetek Enterprise

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Advancetek Enterprise Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Advancetek Enterprise is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Asia Tech Image

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Asia Tech Image has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Asia Tech 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 Advancetek Enterprise and Asia Tech

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

The idea behind Advancetek Enterprise Co and Asia Tech Image 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 Global Correlations module to find global opportunities by holding instruments from different markets.