Correlation Between Asustek Computer and Wonderful
Can any of the company-specific risk be diversified away by investing in both Asustek Computer and Wonderful 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 Wonderful into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asustek Computer and Wonderful Hi Tech Co, you can compare the effects of market volatilities on Asustek Computer and Wonderful 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 Wonderful. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asustek Computer and Wonderful.
Diversification Opportunities for Asustek Computer and Wonderful
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asustek and Wonderful is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Asustek Computer and Wonderful Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonderful Hi Tech 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 Wonderful. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonderful Hi Tech has no effect on the direction of Asustek Computer i.e., Asustek Computer and Wonderful go up and down completely randomly.
Pair Corralation between Asustek Computer and Wonderful
Assuming the 90 days trading horizon Asustek Computer is expected to under-perform the Wonderful. In addition to that, Asustek Computer is 1.21 times more volatile than Wonderful Hi Tech Co. It trades about -0.03 of its total potential returns per unit of risk. Wonderful Hi Tech Co is currently generating about -0.03 per unit of volatility. If you would invest 3,550 in Wonderful Hi Tech Co on September 13, 2024 and sell it today you would lose (35.00) from holding Wonderful Hi Tech Co or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asustek Computer vs. Wonderful Hi Tech Co
Performance |
| Timeline |
| Asustek Computer |
| Wonderful Hi Tech |
Asustek Computer and Wonderful Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asustek Computer and Wonderful
The main advantage of trading using opposite Asustek Computer and Wonderful positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asustek Computer position performs unexpectedly, Wonderful 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 Wonderful will offset losses from the drop in Wonderful's long position.| Asustek Computer vs. AU Optronics | Asustek Computer vs. Innolux Corp | Asustek Computer vs. Ruentex Development Co | Asustek Computer vs. WiseChip Semiconductor |
| Wonderful vs. Gemtek Technology Co | Wonderful vs. Ruentex Development Co | Wonderful vs. WiseChip Semiconductor | Wonderful vs. Novatek Microelectronics Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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