Correlation Between Addentax Group and CH Robinson

Can any of the company-specific risk be diversified away by investing in both Addentax Group and CH Robinson 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 CH Robinson 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 CH Robinson Worldwide, you can compare the effects of market volatilities on Addentax Group and CH Robinson 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 CH Robinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addentax Group and CH Robinson.

Diversification Opportunities for Addentax Group and CH Robinson

0.54

Correlation Coefficient

Addentax Group  CH Robinson

Very weak diversification

The 3 months correlation between Addentax and CHRW is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Addentax Group Corp and CH Robinson Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH Robinson Worldwide 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 CH Robinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH Robinson Worldwide has no effect on the direction of Addentax Group i.e., Addentax Group and CH Robinson go up and down completely randomly.

Pair Corralation between Addentax Group and CH Robinson

Given the investment horizon of 90 days Addentax Group Corp is expected to generate 4.41 times more return on investment than CH Robinson. However, Addentax Group is 4.41 times more volatile than CH Robinson Worldwide. It trades about 0.05 of its potential returns per unit of risk. CH Robinson Worldwide is currently generating about 0.04 per unit of risk. If you would invest  51.00  in Addentax Group Corp on September 3, 2024 and sell it today you would earn a total of  4.00  from holding Addentax Group Corp or generate 7.84% return on investment over 90 days.

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

Addentax Group Corp  vs.  CH Robinson Worldwide

Addentax Group Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Addentax Group Corp are ranked lower than 3 (%) 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.

CH Robinson Worldwide

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Addentax Group and CH Robinson

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

The idea behind Addentax Group Corp and CH Robinson Worldwide 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.