Correlation Between Asustek Computer and NEXCOM International
Can any of the company-specific risk be diversified away by investing in both Asustek Computer and NEXCOM International 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 NEXCOM International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asustek Computer and NEXCOM International Co, you can compare the effects of market volatilities on Asustek Computer and NEXCOM International 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 NEXCOM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asustek Computer and NEXCOM International.
Diversification Opportunities for Asustek Computer and NEXCOM International
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asustek and NEXCOM is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Asustek Computer and NEXCOM International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXCOM International 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 NEXCOM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXCOM International has no effect on the direction of Asustek Computer i.e., Asustek Computer and NEXCOM International go up and down completely randomly.
Pair Corralation between Asustek Computer and NEXCOM International
Assuming the 90 days trading horizon Asustek Computer is expected to generate 3.39 times less return on investment than NEXCOM International. But when comparing it to its historical volatility, Asustek Computer is 1.36 times less risky than NEXCOM International. It trades about 0.05 of its potential returns per unit of risk. NEXCOM International Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,040 in NEXCOM International Co on August 27, 2024 and sell it today you would earn a total of 220.00 from holding NEXCOM International Co or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asustek Computer vs. NEXCOM International Co
Performance |
| Timeline |
| Asustek Computer |
| NEXCOM International |
Asustek Computer and NEXCOM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asustek Computer and NEXCOM International
The main advantage of trading using opposite Asustek Computer and NEXCOM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asustek Computer position performs unexpectedly, NEXCOM International 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 NEXCOM International will offset losses from the drop in NEXCOM International's long position.| Asustek Computer vs. Quanta Computer | Asustek Computer vs. Acer Inc | Asustek Computer vs. United Microelectronics | Asustek Computer vs. Compal Electronics |
| NEXCOM International vs. Advantech Co | NEXCOM International vs. Asustek Computer | NEXCOM International vs. Lite On Technology Corp | NEXCOM International vs. Micro Star International Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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