Correlation Between Genius Electronic and Asia Optical
Can any of the company-specific risk be diversified away by investing in both Genius Electronic and Asia Optical 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 Genius Electronic and Asia Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genius Electronic Optical and Asia Optical Co, you can compare the effects of market volatilities on Genius Electronic and Asia Optical 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 Genius Electronic with a short position of Asia Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genius Electronic and Asia Optical.
Diversification Opportunities for Genius Electronic and Asia Optical
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Genius and Asia is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Genius Electronic Optical and Asia Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Optical and Genius Electronic 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 Genius Electronic Optical are associated (or correlated) with Asia Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Optical has no effect on the direction of Genius Electronic i.e., Genius Electronic and Asia Optical go up and down completely randomly.
Pair Corralation between Genius Electronic and Asia Optical
Assuming the 90 days trading horizon Genius Electronic is expected to generate 6.09 times less return on investment than Asia Optical. But when comparing it to its historical volatility, Genius Electronic Optical is 1.55 times less risky than Asia Optical. It trades about 0.01 of its potential returns per unit of risk. Asia Optical Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10,300 in Asia Optical Co on August 30, 2024 and sell it today you would earn a total of 200.00 from holding Asia Optical Co or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genius Electronic Optical vs. Asia Optical Co
Performance |
| Timeline |
| Genius Electronic Optical |
| Asia Optical |
Genius Electronic and Asia Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genius Electronic and Asia Optical
The main advantage of trading using opposite Genius Electronic and Asia Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genius Electronic position performs unexpectedly, Asia Optical 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 Optical will offset losses from the drop in Asia Optical's long position.| Genius Electronic vs. LARGAN Precision Co | Genius Electronic vs. Unimicron Technology Corp | Genius Electronic vs. WIN Semiconductors | Genius Electronic vs. Novatek Microelectronics Corp |
| Asia Optical vs. LARGAN Precision Co | Asia Optical vs. Novatek Microelectronics Corp | Asia Optical vs. Genius Electronic Optical | Asia Optical vs. Unimicron Technology 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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