Correlation Between Advanced Information and Dexon Technology

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

By analyzing existing cross correlation between Advanced Information Technology and Dexon Technology PCL, you can compare the effects of market volatilities on Advanced Information and Dexon Technology 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 Advanced Information with a short position of Dexon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Information and Dexon Technology.

Diversification Opportunities for Advanced Information and Dexon Technology

0.33

Correlation Coefficient

Advanced Information  Dexon Technology

Weak diversification

The 3 months correlation between Advanced and Dexon is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Information Technolog and Dexon Technology PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexon Technology PCL and Advanced Information 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 Advanced Information Technology are associated (or correlated) with Dexon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexon Technology PCL has no effect on the direction of Advanced Information i.e., Advanced Information and Dexon Technology go up and down completely randomly.

Pair Corralation between Advanced Information and Dexon Technology

Assuming the 90 days trading horizon Advanced Information Technology is expected to generate 0.69 times more return on investment than Dexon Technology. However, Advanced Information Technology is 1.44 times less risky than Dexon Technology. It trades about 0.18 of its potential returns per unit of risk. Dexon Technology PCL is currently generating about 0.04 per unit of risk. If you would invest  416.00  in Advanced Information Technology on April 25, 2025 and sell it today you would earn a total of  89.00  from holding Advanced Information Technology or generate 21.39% return on investment over 90 days.

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

Advanced Information Technolog  vs.  Dexon Technology PCL

Advanced Information

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Information Technology are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Advanced Information disclosed solid returns over the last few months and may actually be approaching a breakup point.

Dexon Technology PCL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dexon Technology PCL are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Dexon Technology may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Advanced Information and Dexon Technology

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

The idea behind Advanced Information Technology and Dexon Technology PCL 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.