Correlation Between Euro Tech and Addentax Group

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

By analyzing existing cross correlation between Euro Tech Holdings and Addentax Group Corp, you can compare the effects of market volatilities on Euro Tech and Addentax Group 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 Euro Tech with a short position of Addentax Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euro Tech and Addentax Group.

Diversification Opportunities for Euro Tech and Addentax Group

0.45

Correlation Coefficient

Euro Tech  Addentax Group

Very weak diversification

The 3 months correlation between Euro and Addentax is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Euro Tech Holdings and Addentax Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addentax Group Corp and Euro 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 Euro Tech Holdings are associated (or correlated) with Addentax Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addentax Group Corp has no effect on the direction of Euro Tech i.e., Euro Tech and Addentax Group go up and down completely randomly.

Pair Corralation between Euro Tech and Addentax Group

Given the investment horizon of 90 days Euro Tech is expected to generate 7.4 times less return on investment than Addentax Group. But when comparing it to its historical volatility, Euro Tech Holdings is 2.09 times less risky than Addentax Group. It trades about 0.01 of its potential returns per unit of risk. Addentax Group Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  46.00  in Addentax Group Corp on August 13, 2025 and sell it today you would lose (0.15) from holding Addentax Group Corp or give up 0.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Euro Tech Holdings  vs.  Addentax Group Corp

Euro Tech Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days Euro Tech Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Euro Tech is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Addentax Group Corp

Risk-Adjusted Performance

Soft

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 weak basic indicators, Addentax Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Euro Tech and Addentax Group

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

The idea behind Euro Tech Holdings and Addentax Group Corp 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.