Correlation Between Asia Electronic and Datavan International
Can any of the company-specific risk be diversified away by investing in both Asia Electronic and Datavan International 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 Asia Electronic and Datavan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Electronic Material and Datavan International, you can compare the effects of market volatilities on Asia Electronic and Datavan International 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 Asia Electronic with a short position of Datavan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Electronic and Datavan International.
Diversification Opportunities for Asia Electronic and Datavan International
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asia and Datavan is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Asia Electronic Material and Datavan International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datavan International and Asia 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 Asia Electronic Material are associated (or correlated) with Datavan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datavan International has no effect on the direction of Asia Electronic i.e., Asia Electronic and Datavan International go up and down completely randomly.
Pair Corralation between Asia Electronic and Datavan International
Assuming the 90 days trading horizon Asia Electronic is expected to generate 3.14 times less return on investment than Datavan International. But when comparing it to its historical volatility, Asia Electronic Material is 1.28 times less risky than Datavan International. It trades about 0.01 of its potential returns per unit of risk. Datavan International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,805 in Datavan International on September 4, 2024 and sell it today you would earn a total of 110.00 from holding Datavan International or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Electronic Material vs. Datavan International
Performance |
| Timeline |
| Asia Electronic Material |
| Datavan International |
Asia Electronic and Datavan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Electronic and Datavan International
The main advantage of trading using opposite Asia Electronic and Datavan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Electronic position performs unexpectedly, Datavan International 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 Datavan International will offset losses from the drop in Datavan International's long position.| Asia Electronic vs. Wistron Information Technology | Asia Electronic vs. Hannstar Display Corp | Asia Electronic vs. Mercuries Data Systems | Asia Electronic vs. Otsuka Information Technology |
| Datavan International vs. Cheng Mei Materials | Datavan International vs. Nankang Rubber Tire | Datavan International vs. Air Asia Co | Datavan International vs. Asia Electronic Material |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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