Correlation Between Aspeed Technology and D Link
Can any of the company-specific risk be diversified away by investing in both Aspeed Technology and D Link 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 Aspeed Technology and D Link into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspeed Technology and D Link Corp, you can compare the effects of market volatilities on Aspeed Technology and D Link 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 Aspeed Technology with a short position of D Link. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspeed Technology and D Link.
Diversification Opportunities for Aspeed Technology and D Link
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aspeed and 2332 is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aspeed Technology and D Link Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on D Link Corp and Aspeed Technology 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 Aspeed Technology are associated (or correlated) with D Link. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of D Link Corp has no effect on the direction of Aspeed Technology i.e., Aspeed Technology and D Link go up and down completely randomly.
Pair Corralation between Aspeed Technology and D Link
Assuming the 90 days trading horizon Aspeed Technology is expected to under-perform the D Link. In addition to that, Aspeed Technology is 1.35 times more volatile than D Link Corp. It trades about -0.05 of its total potential returns per unit of risk. D Link Corp is currently generating about 0.22 per unit of volatility. If you would invest 1,950 in D Link Corp on August 27, 2024 and sell it today you would earn a total of 255.00 from holding D Link Corp or generate 13.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspeed Technology vs. D Link Corp
Performance |
| Timeline |
| Aspeed Technology |
| D Link Corp |
Aspeed Technology and D Link Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspeed Technology and D Link
The main advantage of trading using opposite Aspeed Technology and D Link positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspeed Technology position performs unexpectedly, D Link 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 D Link will offset losses from the drop in D Link's long position.| Aspeed Technology vs. Global Unichip Corp | Aspeed Technology vs. Asmedia Technology | Aspeed Technology vs. Unimicron Technology Corp | Aspeed Technology vs. Novatek Microelectronics Corp |
| D Link vs. Novatek Microelectronics Corp | D Link vs. Quanta Computer | D Link vs. United Microelectronics |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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