Correlation Between Daou Technology and Asia Technology
Can any of the company-specific risk be diversified away by investing in both Daou Technology and Asia 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 Daou Technology and Asia Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daou Technology and Asia Technology Co, you can compare the effects of market volatilities on Daou Technology and Asia 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 Daou Technology with a short position of Asia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Technology and Asia Technology.
Diversification Opportunities for Daou Technology and Asia Technology
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daou and Asia is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Daou Technology and Asia Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Technology and Daou Technology 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 Daou Technology are associated (or correlated) with Asia Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Technology has no effect on the direction of Daou Technology i.e., Daou Technology and Asia Technology go up and down completely randomly.
Pair Corralation between Daou Technology and Asia Technology
Assuming the 90 days trading horizon Daou Technology is expected to generate 1.5 times less return on investment than Asia Technology. But when comparing it to its historical volatility, Daou Technology is 2.87 times less risky than Asia Technology. It trades about 0.02 of its potential returns per unit of risk. Asia Technology Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 220,000 in Asia Technology Co on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Asia Technology Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daou Technology vs. Asia Technology Co
Performance |
| Timeline |
| Daou Technology |
| Asia Technology |
Daou Technology and Asia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Technology and Asia Technology
The main advantage of trading using opposite Daou Technology and Asia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Technology position performs unexpectedly, Asia 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 Asia Technology will offset losses from the drop in Asia Technology's long position.| Daou Technology vs. AptaBio Therapeutics | Daou Technology vs. Daewoo SBI SPAC | Daou Technology vs. Dream Security co | Daou Technology vs. Microfriend |
| Asia Technology vs. Lotte Data Communication | Asia Technology vs. Eugene Technology CoLtd | Asia Technology vs. Daishin Information Communications | Asia Technology vs. Guyoung Technology Co |
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 the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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