Correlation Between Asustek Computer and Hi Lai
Can any of the company-specific risk be diversified away by investing in both Asustek Computer and Hi Lai 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 Hi Lai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asustek Computer and Hi Lai Foods Co, you can compare the effects of market volatilities on Asustek Computer and Hi Lai 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 Hi Lai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asustek Computer and Hi Lai.
Diversification Opportunities for Asustek Computer and Hi Lai
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asustek and 1268 is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Asustek Computer and Hi Lai Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Lai Foods 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 Hi Lai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Lai Foods has no effect on the direction of Asustek Computer i.e., Asustek Computer and Hi Lai go up and down completely randomly.
Pair Corralation between Asustek Computer and Hi Lai
Assuming the 90 days trading horizon Asustek Computer is expected to generate 2.83 times more return on investment than Hi Lai. However, Asustek Computer is 2.83 times more volatile than Hi Lai Foods Co. It trades about 0.11 of its potential returns per unit of risk. Hi Lai Foods Co is currently generating about -0.04 per unit of risk. If you would invest 55,300 in Asustek Computer on August 30, 2024 and sell it today you would earn a total of 4,100 from holding Asustek Computer or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asustek Computer vs. Hi Lai Foods Co
Performance |
| Timeline |
| Asustek Computer |
| Hi Lai Foods |
Asustek Computer and Hi Lai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asustek Computer and Hi Lai
The main advantage of trading using opposite Asustek Computer and Hi Lai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asustek Computer position performs unexpectedly, Hi Lai 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 Hi Lai will offset losses from the drop in Hi Lai's long position.| Asustek Computer vs. Quanta Computer | Asustek Computer vs. Acer Inc | Asustek Computer vs. United Microelectronics | Asustek Computer vs. Compal Electronics |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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