Correlation Between Elitegroup Computer and AOPEN
Can any of the company-specific risk be diversified away by investing in both Elitegroup Computer and AOPEN 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 Elitegroup Computer and AOPEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elitegroup Computer Systems and AOPEN Inc, you can compare the effects of market volatilities on Elitegroup Computer and AOPEN 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 Elitegroup Computer with a short position of AOPEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elitegroup Computer and AOPEN.
Diversification Opportunities for Elitegroup Computer and AOPEN
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Elitegroup and AOPEN is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Elitegroup Computer Systems and AOPEN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOPEN Inc and Elitegroup Computer 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 Elitegroup Computer Systems are associated (or correlated) with AOPEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOPEN Inc has no effect on the direction of Elitegroup Computer i.e., Elitegroup Computer and AOPEN go up and down completely randomly.
Pair Corralation between Elitegroup Computer and AOPEN
Assuming the 90 days trading horizon Elitegroup Computer is expected to generate 7.73 times less return on investment than AOPEN. But when comparing it to its historical volatility, Elitegroup Computer Systems is 1.43 times less risky than AOPEN. It trades about 0.1 of its potential returns per unit of risk. AOPEN Inc is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest 4,550 in AOPEN Inc on November 28, 2024 and sell it today you would earn a total of 760.00 from holding AOPEN Inc or generate 16.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.44% |
| Values | Daily Returns |
Elitegroup Computer Systems vs. AOPEN Inc
Performance |
| Timeline |
| Elitegroup Computer |
| AOPEN Inc |
Elitegroup Computer and AOPEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elitegroup Computer and AOPEN
The main advantage of trading using opposite Elitegroup Computer and AOPEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elitegroup Computer position performs unexpectedly, AOPEN 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 AOPEN will offset losses from the drop in AOPEN's long position.| Elitegroup Computer vs. Micro Star International Co | Elitegroup Computer vs. Gigabyte Technology Co | Elitegroup Computer vs. Compal Electronics | Elitegroup Computer vs. VIA Technologies |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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