Correlation Between Asustek Computer and Micro Star
Can any of the company-specific risk be diversified away by investing in both Asustek Computer and Micro Star 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 Micro Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asustek Computer and Micro Star International Co, you can compare the effects of market volatilities on Asustek Computer and Micro Star 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 Micro Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asustek Computer and Micro Star.
Diversification Opportunities for Asustek Computer and Micro Star
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asustek and Micro is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Asustek Computer and Micro Star International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Star Internati 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 Micro Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Star Internati has no effect on the direction of Asustek Computer i.e., Asustek Computer and Micro Star go up and down completely randomly.
Pair Corralation between Asustek Computer and Micro Star
Assuming the 90 days trading horizon Asustek Computer is expected to generate 0.97 times more return on investment than Micro Star. However, Asustek Computer is 1.03 times less risky than Micro Star. It trades about -0.02 of its potential returns per unit of risk. Micro Star International Co is currently generating about -0.04 per unit of risk. If you would invest 61,300 in Asustek Computer on October 26, 2024 and sell it today you would lose (600.00) from holding Asustek Computer or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asustek Computer vs. Micro Star International Co
Performance |
| Timeline |
| Asustek Computer |
| Micro Star Internati |
Asustek Computer and Micro Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asustek Computer and Micro Star
The main advantage of trading using opposite Asustek Computer and Micro Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asustek Computer position performs unexpectedly, Micro Star 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 Micro Star will offset losses from the drop in Micro Star's long position.| Asustek Computer vs. Quanta Computer | Asustek Computer vs. Acer Inc | Asustek Computer vs. United Microelectronics | Asustek Computer vs. Compal Electronics |
| Micro Star vs. Gigabyte Technology Co | Micro Star vs. Asustek Computer | Micro Star vs. Quanta Computer | Micro Star 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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