Correlation Between Advent Wireless and Kua Investments

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

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

Diversification Opportunities for Advent Wireless and Kua Investments

0.03

Correlation Coefficient

Advent Wireless  Kua Investments

Significant diversification

The 3 months correlation between Advent and Kua is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Advent Wireless and Kua Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kua Investments and Advent Wireless 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 Advent Wireless are associated (or correlated) with Kua Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kua Investments has no effect on the direction of Advent Wireless i.e., Advent Wireless and Kua Investments go up and down completely randomly.

Pair Corralation between Advent Wireless and Kua Investments

Assuming the 90 days horizon Advent Wireless is expected to generate 0.97 times more return on investment than Kua Investments. However, Advent Wireless is 1.03 times less risky than Kua Investments. It trades about -0.07 of its potential returns per unit of risk. Kua Investments is currently generating about -0.13 per unit of risk. If you would invest  65.00  in Advent Wireless on April 25, 2025 and sell it today you would lose (9.00) from holding Advent Wireless or give up 13.85% of portfolio value over 90 days.

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

Advent Wireless  vs.  Kua Investments

Advent Wireless

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advent Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating 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.

Kua Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kua Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Advent Wireless and Kua Investments

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

The idea behind Advent Wireless and Kua Investments 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.