Correlation Between Asustek Computer and Analog Integrations
Can any of the company-specific risk be diversified away by investing in both Asustek Computer and Analog Integrations 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 Analog Integrations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asustek Computer and Analog Integrations, you can compare the effects of market volatilities on Asustek Computer and Analog Integrations 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 Analog Integrations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asustek Computer and Analog Integrations.
Diversification Opportunities for Asustek Computer and Analog Integrations
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asustek and Analog is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Asustek Computer and Analog Integrations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Integrations 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 Analog Integrations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Integrations has no effect on the direction of Asustek Computer i.e., Asustek Computer and Analog Integrations go up and down completely randomly.
Pair Corralation between Asustek Computer and Analog Integrations
Assuming the 90 days trading horizon Asustek Computer is expected to generate 0.78 times more return on investment than Analog Integrations. However, Asustek Computer is 1.28 times less risky than Analog Integrations. It trades about 0.06 of its potential returns per unit of risk. Analog Integrations is currently generating about -0.11 per unit of risk. If you would invest 46,400 in Asustek Computer on November 3, 2024 and sell it today you would earn a total of 14,300 from holding Asustek Computer or generate 30.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asustek Computer vs. Analog Integrations
Performance |
| Timeline |
| Asustek Computer |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Analog Integrations |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Asustek Computer and Analog Integrations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asustek Computer and Analog Integrations
The main advantage of trading using opposite Asustek Computer and Analog Integrations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asustek Computer position performs unexpectedly, Analog Integrations 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 Analog Integrations will offset losses from the drop in Analog Integrations' long position.The idea behind Asustek Computer and Analog Integrations pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |