Correlation Between Greatek Electronics and ASRock
Can any of the company-specific risk be diversified away by investing in both Greatek Electronics and ASRock 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 Greatek Electronics and ASRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatek Electronics and ASRock Inc, you can compare the effects of market volatilities on Greatek Electronics and ASRock 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 Greatek Electronics with a short position of ASRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatek Electronics and ASRock.
Diversification Opportunities for Greatek Electronics and ASRock
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Greatek and ASRock is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Greatek Electronics and ASRock Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASRock Inc and Greatek Electronics 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 Greatek Electronics are associated (or correlated) with ASRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASRock Inc has no effect on the direction of Greatek Electronics i.e., Greatek Electronics and ASRock go up and down completely randomly.
Pair Corralation between Greatek Electronics and ASRock
Assuming the 90 days trading horizon Greatek Electronics is expected to generate 0.52 times more return on investment than ASRock. However, Greatek Electronics is 1.94 times less risky than ASRock. It trades about -0.02 of its potential returns per unit of risk. ASRock Inc is currently generating about -0.04 per unit of risk. If you would invest 6,110 in Greatek Electronics on September 1, 2024 and sell it today you would lose (440.00) from holding Greatek Electronics or give up 7.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greatek Electronics vs. ASRock Inc
Performance |
| Timeline |
| Greatek Electronics |
| ASRock Inc |
Greatek Electronics and ASRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatek Electronics and ASRock
The main advantage of trading using opposite Greatek Electronics and ASRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatek Electronics position performs unexpectedly, ASRock 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 ASRock will offset losses from the drop in ASRock's long position.| Greatek Electronics vs. King Yuan Electronics | Greatek Electronics vs. Powertech Technology | Greatek Electronics vs. Realtek Semiconductor Corp | Greatek Electronics vs. Elan 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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