Correlation Between Gloria Material and Asia Electronic
Can any of the company-specific risk be diversified away by investing in both Gloria Material and Asia Electronic 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 Gloria Material and Asia Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gloria Material Technology and Asia Electronic Material, you can compare the effects of market volatilities on Gloria Material and Asia Electronic 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 Gloria Material with a short position of Asia Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gloria Material and Asia Electronic.
Diversification Opportunities for Gloria Material and Asia Electronic
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gloria and Asia is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Gloria Material Technology and Asia Electronic Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Electronic Material and Gloria Material 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 Gloria Material Technology are associated (or correlated) with Asia Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Electronic Material has no effect on the direction of Gloria Material i.e., Gloria Material and Asia Electronic go up and down completely randomly.
Pair Corralation between Gloria Material and Asia Electronic
Assuming the 90 days trading horizon Gloria Material Technology is expected to generate 0.74 times more return on investment than Asia Electronic. However, Gloria Material Technology is 1.34 times less risky than Asia Electronic. It trades about -0.02 of its potential returns per unit of risk. Asia Electronic Material is currently generating about -0.02 per unit of risk. If you would invest 4,952 in Gloria Material Technology on September 3, 2024 and sell it today you would lose (232.00) from holding Gloria Material Technology or give up 4.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gloria Material Technology vs. Asia Electronic Material
Performance |
| Timeline |
| Gloria Material Tech |
| Asia Electronic Material |
Gloria Material and Asia Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gloria Material and Asia Electronic
The main advantage of trading using opposite Gloria Material and Asia Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gloria Material position performs unexpectedly, Asia Electronic 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 Asia Electronic will offset losses from the drop in Asia Electronic's long position.| Gloria Material vs. Thunder Tiger Corp | Gloria Material vs. Synmosa Biopharma | Gloria Material vs. Oriental Union Chemical | Gloria Material vs. Ruentex Development Co |
| Asia Electronic vs. Hon Hai Precision | Asia Electronic vs. Delta Electronics | Asia Electronic vs. LARGAN Precision Co | Asia Electronic vs. AU Optronics |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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