Correlation Between Asustek Computer and Cal Comp
Can any of the company-specific risk be diversified away by investing in both Asustek Computer and Cal Comp 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 Cal Comp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asustek Computer and Cal Comp Electronics Public, you can compare the effects of market volatilities on Asustek Computer and Cal Comp 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 Cal Comp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asustek Computer and Cal Comp.
Diversification Opportunities for Asustek Computer and Cal Comp
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asustek and Cal is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Asustek Computer and Cal Comp Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Comp Electronics 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 Cal Comp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Comp Electronics has no effect on the direction of Asustek Computer i.e., Asustek Computer and Cal Comp go up and down completely randomly.
Pair Corralation between Asustek Computer and Cal Comp
Assuming the 90 days trading horizon Asustek Computer is expected to generate 2.85 times less return on investment than Cal Comp. But when comparing it to its historical volatility, Asustek Computer is 1.79 times less risky than Cal Comp. It trades about 0.09 of its potential returns per unit of risk. Cal Comp Electronics Public is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 425.00 in Cal Comp Electronics Public on September 3, 2024 and sell it today you would earn a total of 337.00 from holding Cal Comp Electronics Public or generate 79.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asustek Computer vs. Cal Comp Electronics Public
Performance |
| Timeline |
| Asustek Computer |
| Cal Comp Electronics |
Asustek Computer and Cal Comp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asustek Computer and Cal Comp
The main advantage of trading using opposite Asustek Computer and Cal Comp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asustek Computer position performs unexpectedly, Cal Comp 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 Cal Comp will offset losses from the drop in Cal Comp's long position.| Asustek Computer vs. Taiwan Semiconductor Manufacturing | Asustek Computer vs. Yang Ming Marine | Asustek Computer vs. ASE Industrial Holding | Asustek Computer vs. AU Optronics |
| Cal Comp vs. Ton Yi Industrial | Cal Comp vs. Chenming Mold Industrial | Cal Comp vs. Gigastorage Corp | Cal Comp vs. AV Tech 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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