Correlation Between Emerging Display and Asustek Computer
Can any of the company-specific risk be diversified away by investing in both Emerging Display and Asustek Computer 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 Emerging Display and Asustek Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Display Technologies and Asustek Computer, you can compare the effects of market volatilities on Emerging Display and Asustek Computer 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 Emerging Display with a short position of Asustek Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Display and Asustek Computer.
Diversification Opportunities for Emerging Display and Asustek Computer
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Emerging and Asustek is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Display Technologies and Asustek Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asustek Computer and Emerging Display 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 Emerging Display Technologies are associated (or correlated) with Asustek Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asustek Computer has no effect on the direction of Emerging Display i.e., Emerging Display and Asustek Computer go up and down completely randomly.
Pair Corralation between Emerging Display and Asustek Computer
Assuming the 90 days trading horizon Emerging Display Technologies is expected to generate 1.39 times more return on investment than Asustek Computer. However, Emerging Display is 1.39 times more volatile than Asustek Computer. It trades about 0.05 of its potential returns per unit of risk. Asustek Computer is currently generating about 0.06 per unit of risk. If you would invest 2,600 in Emerging Display Technologies on October 14, 2024 and sell it today you would earn a total of 50.00 from holding Emerging Display Technologies or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Display Technologies vs. Asustek Computer
Performance |
| Timeline |
| Emerging Display Tec |
| Asustek Computer |
Emerging Display and Asustek Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Display and Asustek Computer
The main advantage of trading using opposite Emerging Display and Asustek Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Display position performs unexpectedly, Asustek Computer 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 Asustek Computer will offset losses from the drop in Asustek Computer's long position.| Emerging Display vs. Gloria Material Technology | Emerging Display vs. GeneReach Biotechnology | Emerging Display vs. Cheng Mei Materials | Emerging Display vs. Solar Applied Materials |
| Asustek Computer vs. Quanta Computer | Asustek Computer vs. Acer Inc | Asustek Computer vs. United Microelectronics | Asustek Computer vs. Compal Electronics |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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