Correlation Between Aspeed Technology and Highwealth Construction
Can any of the company-specific risk be diversified away by investing in both Aspeed Technology and Highwealth Construction 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 Highwealth Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspeed Technology and Highwealth Construction Corp, you can compare the effects of market volatilities on Aspeed Technology and Highwealth Construction 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 Highwealth Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspeed Technology and Highwealth Construction.
Diversification Opportunities for Aspeed Technology and Highwealth Construction
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aspeed and Highwealth is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aspeed Technology and Highwealth Construction Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highwealth Construction 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 Highwealth Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highwealth Construction has no effect on the direction of Aspeed Technology i.e., Aspeed Technology and Highwealth Construction go up and down completely randomly.
Pair Corralation between Aspeed Technology and Highwealth Construction
Assuming the 90 days trading horizon Aspeed Technology is expected to generate 1.9 times more return on investment than Highwealth Construction. However, Aspeed Technology is 1.9 times more volatile than Highwealth Construction Corp. It trades about 0.06 of its potential returns per unit of risk. Highwealth Construction Corp is currently generating about 0.01 per unit of risk. If you would invest 194,342 in Aspeed Technology on August 30, 2024 and sell it today you would earn a total of 199,158 from holding Aspeed Technology or generate 102.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspeed Technology vs. Highwealth Construction Corp
Performance |
| Timeline |
| Aspeed Technology |
| Highwealth Construction |
Aspeed Technology and Highwealth Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspeed Technology and Highwealth Construction
The main advantage of trading using opposite Aspeed Technology and Highwealth Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspeed Technology position performs unexpectedly, Highwealth Construction 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 Highwealth Construction will offset losses from the drop in Highwealth Construction's long position.| Aspeed Technology vs. Asmedia Technology | Aspeed Technology vs. Silergy Corp | Aspeed Technology vs. Parade Technologies | Aspeed Technology vs. Wiwynn Corp |
| Highwealth Construction vs. Tainan Spinning Co | Highwealth Construction vs. Carnival Industrial Corp | Highwealth Construction vs. Symtek Automation Asia | Highwealth Construction vs. CTCI Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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