Correlation Between ESUN Financial and ASRock
Can any of the company-specific risk be diversified away by investing in both ESUN Financial 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 ESUN Financial and ASRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESUN Financial Holding and ASRock Inc, you can compare the effects of market volatilities on ESUN Financial 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 ESUN Financial with a short position of ASRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESUN Financial and ASRock.
Diversification Opportunities for ESUN Financial and ASRock
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ESUN and ASRock is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding ESUN Financial Holding and ASRock Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASRock Inc and ESUN Financial 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 ESUN Financial Holding 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 ESUN Financial i.e., ESUN Financial and ASRock go up and down completely randomly.
Pair Corralation between ESUN Financial and ASRock
Assuming the 90 days trading horizon ESUN Financial is expected to generate 2.14 times less return on investment than ASRock. But when comparing it to its historical volatility, ESUN Financial Holding is 2.28 times less risky than ASRock. It trades about 0.02 of its potential returns per unit of risk. ASRock Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 24,250 in ASRock Inc on November 28, 2024 and sell it today you would earn a total of 800.00 from holding ASRock Inc or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.79% |
| Values | Daily Returns |
ESUN Financial Holding vs. ASRock Inc
Performance |
| Timeline |
| ESUN Financial Holding |
| ASRock Inc |
ESUN Financial and ASRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESUN Financial and ASRock
The main advantage of trading using opposite ESUN Financial and ASRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESUN Financial 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.| ESUN Financial vs. Mega Financial Holding | ESUN Financial vs. CTBC Financial Holding | ESUN Financial vs. First Financial Holding | ESUN Financial vs. Fubon Financial Holding |
| ASRock vs. Gigabyte Technology Co | ASRock vs. Micro Star International Co | ASRock vs. Asustek Computer | ASRock vs. Kinsus Interconnect Technology |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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