Correlation Between Adobe Systems and A10 Networks

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Can any of the company-specific risk be diversified away by investing in both Adobe Systems and A10 Networks 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 Adobe Systems and A10 Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adobe Systems and A10 Networks, you can compare the effects of market volatilities on Adobe Systems and A10 Networks 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 Adobe Systems with a short position of A10 Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adobe Systems and A10 Networks.

Diversification Opportunities for Adobe Systems and A10 Networks

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Adobe and A10 Networks is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Adobe Systems and A10 Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A10 Networks and Adobe Systems 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 Adobe Systems are associated (or correlated) with A10 Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A10 Networks has no effect on the direction of Adobe Systems i.e., Adobe Systems and A10 Networks go up and down completely randomly.

Pair Corralation between Adobe Systems and A10 Networks

Given the investment horizon of 90 days Adobe Systems is expected to under-perform the A10 Networks. But the stock apears to be less risky and, when comparing its historical volatility, Adobe Systems is 1.28 times less risky than A10 Networks. The stock trades about -0.27 of its potential returns per unit of risk. The A10 Networks is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest  1,592  in A10 Networks on April 6, 2022 and sell it today you would lose (223.00)  from holding A10 Networks or give up 14.01% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Adobe Systems  vs.  A10 Networks

 Performance (%) 
      Timeline 
Adobe Systems 
Adobe Performance
0 of 100
Over the last 90 days Adobe Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of sluggish performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in August 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Adobe Price Channel

A10 Networks 
A10 Networks Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in A10 Networks are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, A10 Networks may actually be approaching a critical reversion point that can send shares even higher in August 2022.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0148
Payout Ratio
0.24
Forward Annual Dividend Rate
0.2
Dividend Date
2022-06-01
Ex Dividend Date
2022-05-13

A10 Networks Price Channel

Adobe Systems and A10 Networks Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Adobe Systems and A10 Networks

The main advantage of trading using opposite Adobe Systems and A10 Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adobe Systems position performs unexpectedly, A10 Networks 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 A10 Networks will offset losses from the drop in A10 Networks' long position.
The idea behind Adobe Systems and A10 Networks 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.
Check out your portfolio center. 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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