Correlation Between An Shin and Professional Computer
Can any of the company-specific risk be diversified away by investing in both An Shin and Professional Computer 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 An Shin and Professional Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between An Shin Food Services and Professional Computer Technology, you can compare the effects of market volatilities on An Shin and Professional Computer 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 An Shin with a short position of Professional Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Shin and Professional Computer.
Diversification Opportunities for An Shin and Professional Computer
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 1259 and Professional is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding An Shin Food Services and Professional Computer Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Professional Computer and An Shin 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 An Shin Food Services are associated (or correlated) with Professional Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Professional Computer has no effect on the direction of An Shin i.e., An Shin and Professional Computer go up and down completely randomly.
Pair Corralation between An Shin and Professional Computer
Assuming the 90 days trading horizon An Shin Food Services is expected to under-perform the Professional Computer. But the stock apears to be less risky and, when comparing its historical volatility, An Shin Food Services is 3.69 times less risky than Professional Computer. The stock trades about -0.27 of its potential returns per unit of risk. The Professional Computer Technology is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 2,825 in Professional Computer Technology on August 30, 2024 and sell it today you would lose (160.00) from holding Professional Computer Technology or give up 5.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
An Shin Food Services vs. Professional Computer Technolo
Performance |
| Timeline |
| An Shin Food |
| Professional Computer |
An Shin and Professional Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Shin and Professional Computer
The main advantage of trading using opposite An Shin and Professional Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Shin position performs unexpectedly, Professional Computer 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 Professional Computer will offset losses from the drop in Professional Computer's long position.The idea behind An Shin Food Services and Professional Computer Technology 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.| Professional Computer vs. Taiwan Semiconductor Manufacturing | Professional Computer vs. MediaTek | Professional Computer vs. United Microelectronics | Professional Computer vs. Novatek Microelectronics Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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