Correlation Between ASRock and AOPEN
Can any of the company-specific risk be diversified away by investing in both ASRock and AOPEN 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 AOPEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASRock Inc and AOPEN Inc, you can compare the effects of market volatilities on ASRock and AOPEN 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 AOPEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASRock and AOPEN.
Diversification Opportunities for ASRock and AOPEN
Very good diversification
The 3 months correlation between ASRock and AOPEN is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding ASRock Inc and AOPEN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOPEN Inc 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 AOPEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOPEN Inc has no effect on the direction of ASRock i.e., ASRock and AOPEN go up and down completely randomly.
Pair Corralation between ASRock and AOPEN
Assuming the 90 days trading horizon ASRock Inc is expected to generate 2.48 times more return on investment than AOPEN. However, ASRock is 2.48 times more volatile than AOPEN Inc. It trades about 0.22 of its potential returns per unit of risk. AOPEN Inc is currently generating about 0.06 per unit of risk. If you would invest 20,350 in ASRock Inc on September 1, 2024 and sell it today you would earn a total of 3,250 from holding ASRock Inc or generate 15.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ASRock Inc vs. AOPEN Inc
Performance |
| Timeline |
| ASRock Inc |
| AOPEN Inc |
ASRock and AOPEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASRock and AOPEN
The main advantage of trading using opposite ASRock and AOPEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASRock position performs unexpectedly, AOPEN 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 AOPEN will offset losses from the drop in AOPEN's long position.The idea behind ASRock Inc and AOPEN Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |