Correlation Between Asustek Computer and Comtrend Corp
Can any of the company-specific risk be diversified away by investing in both Asustek Computer and Comtrend Corp 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 Comtrend Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asustek Computer and Comtrend Corp, you can compare the effects of market volatilities on Asustek Computer and Comtrend Corp 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 Comtrend Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asustek Computer and Comtrend Corp.
Diversification Opportunities for Asustek Computer and Comtrend Corp
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asustek and Comtrend is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Asustek Computer and Comtrend Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comtrend 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 Comtrend Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comtrend Corp has no effect on the direction of Asustek Computer i.e., Asustek Computer and Comtrend Corp go up and down completely randomly.
Pair Corralation between Asustek Computer and Comtrend Corp
Assuming the 90 days trading horizon Asustek Computer is expected to generate 9.58 times less return on investment than Comtrend Corp. But when comparing it to its historical volatility, Asustek Computer is 2.67 times less risky than Comtrend Corp. It trades about 0.05 of its potential returns per unit of risk. Comtrend Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 8,500 in Comtrend Corp on August 30, 2024 and sell it today you would earn a total of 1,500 from holding Comtrend Corp or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Asustek Computer vs. Comtrend Corp
Performance |
| Timeline |
| Asustek Computer |
| Comtrend Corp |
Asustek Computer and Comtrend Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asustek Computer and Comtrend Corp
The main advantage of trading using opposite Asustek Computer and Comtrend Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asustek Computer position performs unexpectedly, Comtrend Corp 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 Comtrend Corp will offset losses from the drop in Comtrend Corp's long position.| Asustek Computer vs. Quanta Computer | Asustek Computer vs. Acer Inc | Asustek Computer vs. United Microelectronics | Asustek Computer vs. Compal Electronics |
| Comtrend Corp vs. Pacific Hospital Supply | Comtrend Corp vs. Acelon Chemicals Fiber | Comtrend Corp vs. CHC Healthcare Group | Comtrend Corp vs. Kindom Construction 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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