Correlation Between Adval Tech and Feintool International

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

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

Diversification Opportunities for Adval Tech and Feintool International

0.82

Correlation Coefficient

Adval Tech  Feintool International

Very poor diversification

The 3 months correlation between Adval and Feintool is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Adval Tech Holding and Feintool International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feintool International and Adval Tech 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 Adval Tech Holding are associated (or correlated) with Feintool International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feintool International has no effect on the direction of Adval Tech i.e., Adval Tech and Feintool International go up and down completely randomly.

Pair Corralation between Adval Tech and Feintool International

Assuming the 90 days trading horizon Adval Tech Holding is expected to under-perform the Feintool International. In addition to that, Adval Tech is 1.57 times more volatile than Feintool International Holding. It trades about -0.05 of its total potential returns per unit of risk. Feintool International Holding is currently generating about -0.06 per unit of volatility. If you would invest  2,021  in Feintool International Holding on September 14, 2024 and sell it today you would lose (576.00) from holding Feintool International Holding or give up 28.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	70.52%
Values	Daily Returns

Adval Tech Holding  vs.  Feintool International Holding

Adval Tech Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adval Tech Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Feintool International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Feintool International Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Adval Tech and Feintool International

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

The idea behind Adval Tech Holding and Feintool International Holding 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.