Correlation Between Emerging Display and ASRock
Can any of the company-specific risk be diversified away by investing in both Emerging Display 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 Emerging Display and ASRock 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 ASRock Inc, you can compare the effects of market volatilities on Emerging Display 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 Emerging Display with a short position of ASRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Display and ASRock.
Diversification Opportunities for Emerging Display and ASRock
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Emerging and ASRock is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Display Technologies and ASRock Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASRock Inc 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 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 Emerging Display i.e., Emerging Display and ASRock go up and down completely randomly.
Pair Corralation between Emerging Display and ASRock
Assuming the 90 days trading horizon Emerging Display is expected to generate 3.02 times less return on investment than ASRock. But when comparing it to its historical volatility, Emerging Display Technologies is 2.76 times less risky than ASRock. It trades about 0.18 of its potential returns per unit of risk. ASRock Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 20,600 in ASRock Inc on August 30, 2024 and sell it today you would earn a total of 3,000 from holding ASRock Inc or generate 14.56% 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. ASRock Inc
Performance |
| Timeline |
| Emerging Display Tec |
| ASRock Inc |
Emerging Display and ASRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Display and ASRock
The main advantage of trading using opposite Emerging Display and ASRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Display 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.| Emerging Display vs. First Copper Technology | Emerging Display vs. Sunspring Metal Corp | Emerging Display vs. Camellia Metal Co | Emerging Display vs. Amulaire Thermal Technology |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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