Correlation Between Elitegroup Computer and All Ring
Can any of the company-specific risk be diversified away by investing in both Elitegroup Computer and All Ring 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 All Ring 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 All Ring Tech, you can compare the effects of market volatilities on Elitegroup Computer and All Ring 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 All Ring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elitegroup Computer and All Ring.
Diversification Opportunities for Elitegroup Computer and All Ring
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elitegroup and All is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Elitegroup Computer Systems and All Ring Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on All Ring Tech 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 All Ring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of All Ring Tech has no effect on the direction of Elitegroup Computer i.e., Elitegroup Computer and All Ring go up and down completely randomly.
Pair Corralation between Elitegroup Computer and All Ring
Assuming the 90 days trading horizon Elitegroup Computer Systems is expected to generate 0.7 times more return on investment than All Ring. However, Elitegroup Computer Systems is 1.44 times less risky than All Ring. It trades about 0.0 of its potential returns per unit of risk. All Ring Tech is currently generating about -0.06 per unit of risk. If you would invest 2,395 in Elitegroup Computer Systems on September 3, 2024 and sell it today you would lose (15.00) from holding Elitegroup Computer Systems or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elitegroup Computer Systems vs. All Ring Tech
Performance |
| Timeline |
| Elitegroup Computer |
| All Ring Tech |
Elitegroup Computer and All Ring Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elitegroup Computer and All Ring
The main advantage of trading using opposite Elitegroup Computer and All Ring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elitegroup Computer position performs unexpectedly, All Ring 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 All Ring will offset losses from the drop in All Ring's long position.| Elitegroup Computer vs. Taiwan Semiconductor Manufacturing | Elitegroup Computer vs. Yang Ming Marine | Elitegroup Computer vs. ASE Industrial Holding | Elitegroup Computer vs. AU Optronics |
| All Ring vs. Lian Hwa Foods | All Ring vs. Standard Foods Corp | All Ring vs. Hi Lai Foods Co | All Ring vs. TWOWAY Communications |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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