Correlation Between Asia Electronic and Genesis Technology
Can any of the company-specific risk be diversified away by investing in both Asia Electronic and Genesis Technology 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 Genesis Technology 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 Genesis Technology, you can compare the effects of market volatilities on Asia Electronic and Genesis Technology 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 Genesis Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Electronic and Genesis Technology.
Diversification Opportunities for Asia Electronic and Genesis Technology
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asia and Genesis is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Asia Electronic Material and Genesis Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Technology 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 Genesis Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Technology has no effect on the direction of Asia Electronic i.e., Asia Electronic and Genesis Technology go up and down completely randomly.
Pair Corralation between Asia Electronic and Genesis Technology
Assuming the 90 days trading horizon Asia Electronic Material is expected to generate 1.07 times more return on investment than Genesis Technology. However, Asia Electronic is 1.07 times more volatile than Genesis Technology. It trades about 0.04 of its potential returns per unit of risk. Genesis Technology is currently generating about 0.03 per unit of risk. If you would invest 1,546 in Asia Electronic Material on September 2, 2024 and sell it today you would earn a total of 489.00 from holding Asia Electronic Material or generate 31.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Electronic Material vs. Genesis Technology
Performance |
| Timeline |
| Asia Electronic Material |
| Genesis Technology |
Asia Electronic and Genesis Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Electronic and Genesis Technology
The main advantage of trading using opposite Asia Electronic and Genesis Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Electronic position performs unexpectedly, Genesis Technology 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 Genesis Technology will offset losses from the drop in Genesis Technology's long position.| Asia Electronic vs. Hon Hai Precision | Asia Electronic vs. Delta Electronics | Asia Electronic vs. LARGAN Precision Co | Asia Electronic vs. Yageo Corp |
| Genesis Technology vs. Acer E Enabling Service | Genesis Technology vs. Green World Fintech | Genesis Technology vs. Syscom Computer Engineering |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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