Correlation Between Orient Semiconductor and Asustek Computer
Can any of the company-specific risk be diversified away by investing in both Orient Semiconductor and Asustek 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 Orient Semiconductor and Asustek Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orient Semiconductor Electronics and Asustek Computer, you can compare the effects of market volatilities on Orient Semiconductor and Asustek 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 Orient Semiconductor with a short position of Asustek Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Semiconductor and Asustek Computer.
Diversification Opportunities for Orient Semiconductor and Asustek Computer
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Orient and Asustek is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Orient Semiconductor Electroni and Asustek Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asustek Computer and Orient Semiconductor 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 Orient Semiconductor Electronics are associated (or correlated) with Asustek Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asustek Computer has no effect on the direction of Orient Semiconductor i.e., Orient Semiconductor and Asustek Computer go up and down completely randomly.
Pair Corralation between Orient Semiconductor and Asustek Computer
Assuming the 90 days trading horizon Orient Semiconductor Electronics is expected to under-perform the Asustek Computer. In addition to that, Orient Semiconductor is 1.62 times more volatile than Asustek Computer. It trades about -0.03 of its total potential returns per unit of risk. Asustek Computer is currently generating about 0.12 per unit of volatility. If you would invest 53,900 in Asustek Computer on September 12, 2024 and sell it today you would earn a total of 6,500 from holding Asustek Computer or generate 12.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orient Semiconductor Electroni vs. Asustek Computer
Performance |
| Timeline |
| Orient Semiconductor |
| Asustek Computer |
Orient Semiconductor and Asustek Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Semiconductor and Asustek Computer
The main advantage of trading using opposite Orient Semiconductor and Asustek Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Semiconductor position performs unexpectedly, Asustek 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 Asustek Computer will offset losses from the drop in Asustek Computer's long position.| Orient Semiconductor vs. AU Optronics | Orient Semiconductor vs. Innolux Corp | Orient Semiconductor vs. Ruentex Development Co | Orient Semiconductor vs. WiseChip Semiconductor |
| Asustek Computer vs. AU Optronics | Asustek Computer vs. Innolux Corp | Asustek Computer vs. Ruentex Development Co | Asustek Computer vs. WiseChip Semiconductor |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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