Correlation Between ASRock and IEI Integration
Can any of the company-specific risk be diversified away by investing in both ASRock and IEI Integration 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 ASRock and IEI Integration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASRock Inc and IEI Integration Corp, you can compare the effects of market volatilities on ASRock and IEI Integration 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 ASRock with a short position of IEI Integration. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASRock and IEI Integration.
Diversification Opportunities for ASRock and IEI Integration
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ASRock and IEI is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding ASRock Inc and IEI Integration Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IEI Integration Corp and ASRock 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 ASRock Inc are associated (or correlated) with IEI Integration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IEI Integration Corp has no effect on the direction of ASRock i.e., ASRock and IEI Integration go up and down completely randomly.
Pair Corralation between ASRock and IEI Integration
Assuming the 90 days trading horizon ASRock is expected to generate 2.69 times less return on investment than IEI Integration. But when comparing it to its historical volatility, ASRock Inc is 1.33 times less risky than IEI Integration. It trades about 0.27 of its potential returns per unit of risk. IEI Integration Corp is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest 7,690 in IEI Integration Corp on November 28, 2024 and sell it today you would earn a total of 3,060 from holding IEI Integration Corp or generate 39.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASRock Inc vs. IEI Integration Corp
Performance |
| Timeline |
| ASRock Inc |
| IEI Integration Corp |
ASRock and IEI Integration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASRock and IEI Integration
The main advantage of trading using opposite ASRock and IEI Integration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASRock position performs unexpectedly, IEI Integration 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 IEI Integration will offset losses from the drop in IEI Integration's long position.| ASRock vs. Gigabyte Technology Co | ASRock vs. Micro Star International Co | ASRock vs. Asustek Computer | ASRock vs. Kinsus Interconnect Technology |
| IEI Integration vs. Advantech Co | IEI Integration vs. Getac Technology Corp | IEI Integration vs. Flytech Technology Co | IEI Integration vs. ADLINK 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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