Correlation Between IEI Integration and Asia Electronic
Can any of the company-specific risk be diversified away by investing in both IEI Integration and Asia Electronic 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 IEI Integration and Asia Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IEI Integration Corp and Asia Electronic Material, you can compare the effects of market volatilities on IEI Integration and Asia Electronic 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 IEI Integration with a short position of Asia Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of IEI Integration and Asia Electronic.
Diversification Opportunities for IEI Integration and Asia Electronic
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between IEI and Asia is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding IEI Integration Corp and Asia Electronic Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Electronic Material and IEI Integration 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 IEI Integration Corp are associated (or correlated) with Asia Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Electronic Material has no effect on the direction of IEI Integration i.e., IEI Integration and Asia Electronic go up and down completely randomly.
Pair Corralation between IEI Integration and Asia Electronic
Assuming the 90 days trading horizon IEI Integration Corp is expected to generate 2.03 times more return on investment than Asia Electronic. However, IEI Integration is 2.03 times more volatile than Asia Electronic Material. It trades about 0.16 of its potential returns per unit of risk. Asia Electronic Material is currently generating about -0.26 per unit of risk. If you would invest 7,810 in IEI Integration Corp on August 29, 2024 and sell it today you would earn a total of 550.00 from holding IEI Integration Corp or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IEI Integration Corp vs. Asia Electronic Material
Performance |
| Timeline |
| IEI Integration Corp |
| Asia Electronic Material |
IEI Integration and Asia Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IEI Integration and Asia Electronic
The main advantage of trading using opposite IEI Integration and Asia Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IEI Integration position performs unexpectedly, Asia Electronic 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 Asia Electronic will offset losses from the drop in Asia Electronic's long position.| IEI Integration vs. Advantech Co | IEI Integration vs. Getac Technology Corp | IEI Integration vs. Flytech Technology Co | IEI Integration vs. ADLINK Technology |
| Asia Electronic vs. Mayer Steel Pipe | Asia Electronic vs. Sunny Friend Environmental | Asia Electronic vs. Golden Biotechnology | Asia Electronic vs. China Steel 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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