Correlation Between Chung Fu and ASRock
Can any of the company-specific risk be diversified away by investing in both Chung Fu and ASRock 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 Chung Fu and ASRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chung Fu Tex International and ASRock Inc, you can compare the effects of market volatilities on Chung Fu and ASRock 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 Chung Fu with a short position of ASRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Fu and ASRock.
Diversification Opportunities for Chung Fu and ASRock
Very good diversification
The 3 months correlation between Chung and ASRock is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Chung Fu Tex International and ASRock Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASRock Inc and Chung Fu 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 Chung Fu Tex International are associated (or correlated) with ASRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASRock Inc has no effect on the direction of Chung Fu i.e., Chung Fu and ASRock go up and down completely randomly.
Pair Corralation between Chung Fu and ASRock
Assuming the 90 days trading horizon Chung Fu Tex International is expected to under-perform the ASRock. But the stock apears to be less risky and, when comparing its historical volatility, Chung Fu Tex International is 1.05 times less risky than ASRock. The stock trades about -0.06 of its potential returns per unit of risk. The ASRock Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 21,350 in ASRock Inc on August 26, 2024 and sell it today you would earn a total of 1,450 from holding ASRock Inc or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Chung Fu Tex International vs. ASRock Inc
Performance |
| Timeline |
| Chung Fu Tex |
| ASRock Inc |
Chung Fu and ASRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Fu and ASRock
The main advantage of trading using opposite Chung Fu and ASRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Fu position performs unexpectedly, ASRock 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 ASRock will offset losses from the drop in ASRock's long position.| Chung Fu vs. Chunghwa Telecom Co | Chung Fu vs. Tai Tung Communication | Chung Fu vs. Sunspring Metal Corp | Chung Fu vs. Ambassador Hotel |
| ASRock vs. Novatek Microelectronics Corp | ASRock vs. Quanta Computer | ASRock vs. United Microelectronics |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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