Correlation Between Asia Electronic and DingZing Advanced
Can any of the company-specific risk be diversified away by investing in both Asia Electronic and DingZing Advanced 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 DingZing Advanced 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 DingZing Advanced Materials, you can compare the effects of market volatilities on Asia Electronic and DingZing Advanced 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 DingZing Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Electronic and DingZing Advanced.
Diversification Opportunities for Asia Electronic and DingZing Advanced
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Asia and DingZing is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Asia Electronic Material and DingZing Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DingZing Advanced 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 DingZing Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DingZing Advanced has no effect on the direction of Asia Electronic i.e., Asia Electronic and DingZing Advanced go up and down completely randomly.
Pair Corralation between Asia Electronic and DingZing Advanced
Assuming the 90 days trading horizon Asia Electronic is expected to generate 6.89 times less return on investment than DingZing Advanced. But when comparing it to its historical volatility, Asia Electronic Material is 2.77 times less risky than DingZing Advanced. It trades about 0.05 of its potential returns per unit of risk. DingZing Advanced Materials is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 14,650 in DingZing Advanced Materials on December 14, 2024 and sell it today you would earn a total of 1,600 from holding DingZing Advanced Materials or generate 10.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Electronic Material vs. DingZing Advanced Materials
Performance |
| Timeline |
| Asia Electronic Material |
| DingZing Advanced |
Asia Electronic and DingZing Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Electronic and DingZing Advanced
The main advantage of trading using opposite Asia Electronic and DingZing Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Electronic position performs unexpectedly, DingZing Advanced 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 DingZing Advanced will offset losses from the drop in DingZing Advanced's long position.| Asia Electronic vs. Acelon Chemicals Fiber | ||
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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