Correlation Between Asustek Computer and Taiwan Cement
Can any of the company-specific risk be diversified away by investing in both Asustek Computer and Taiwan Cement 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 Asustek Computer and Taiwan Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asustek Computer and Taiwan Cement Corp, you can compare the effects of market volatilities on Asustek Computer and Taiwan Cement 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 Asustek Computer with a short position of Taiwan Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asustek Computer and Taiwan Cement.
Diversification Opportunities for Asustek Computer and Taiwan Cement
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asustek and Taiwan is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Asustek Computer and Taiwan Cement Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Cement Corp and Asustek 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 Asustek Computer are associated (or correlated) with Taiwan Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Cement Corp has no effect on the direction of Asustek Computer i.e., Asustek Computer and Taiwan Cement go up and down completely randomly.
Pair Corralation between Asustek Computer and Taiwan Cement
Assuming the 90 days trading horizon Asustek Computer is expected to generate 12.27 times more return on investment than Taiwan Cement. However, Asustek Computer is 12.27 times more volatile than Taiwan Cement Corp. It trades about 0.05 of its potential returns per unit of risk. Taiwan Cement Corp is currently generating about -0.04 per unit of risk. If you would invest 58,400 in Asustek Computer on August 30, 2024 and sell it today you would earn a total of 1,000.00 from holding Asustek Computer or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asustek Computer vs. Taiwan Cement Corp
Performance |
| Timeline |
| Asustek Computer |
| Taiwan Cement Corp |
Asustek Computer and Taiwan Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asustek Computer and Taiwan Cement
The main advantage of trading using opposite Asustek Computer and Taiwan Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asustek Computer position performs unexpectedly, Taiwan Cement 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 Taiwan Cement will offset losses from the drop in Taiwan Cement's long position.| Asustek Computer vs. Quanta Computer | Asustek Computer vs. Acer Inc | Asustek Computer vs. United Microelectronics | Asustek Computer vs. Compal Electronics |
| Taiwan Cement vs. Sinopac Financial Holdings | Taiwan Cement vs. Hua Nan Financial | Taiwan Cement vs. Pontex Polyblend CoLtd | Taiwan Cement vs. Wei Chuan Foods |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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