Correlation Between Aspeed Technology and LARGAN Precision
Can any of the company-specific risk be diversified away by investing in both Aspeed Technology and LARGAN Precision 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 LARGAN Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspeed Technology and LARGAN Precision Co, you can compare the effects of market volatilities on Aspeed Technology and LARGAN Precision 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 LARGAN Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspeed Technology and LARGAN Precision.
Diversification Opportunities for Aspeed Technology and LARGAN Precision
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aspeed and LARGAN is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aspeed Technology and LARGAN Precision Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LARGAN Precision 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 LARGAN Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LARGAN Precision has no effect on the direction of Aspeed Technology i.e., Aspeed Technology and LARGAN Precision go up and down completely randomly.
Pair Corralation between Aspeed Technology and LARGAN Precision
Assuming the 90 days trading horizon Aspeed Technology is expected to under-perform the LARGAN Precision. In addition to that, Aspeed Technology is 1.69 times more volatile than LARGAN Precision Co. It trades about -0.05 of its total potential returns per unit of risk. LARGAN Precision Co is currently generating about 0.16 per unit of volatility. If you would invest 228,500 in LARGAN Precision Co on August 31, 2024 and sell it today you would earn a total of 16,000 from holding LARGAN Precision Co or generate 7.0% 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. LARGAN Precision Co
Performance |
| Timeline |
| Aspeed Technology |
| LARGAN Precision |
Aspeed Technology and LARGAN Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspeed Technology and LARGAN Precision
The main advantage of trading using opposite Aspeed Technology and LARGAN Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspeed Technology position performs unexpectedly, LARGAN Precision 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 LARGAN Precision will offset losses from the drop in LARGAN Precision's long position.| Aspeed Technology vs. Taiwan Semiconductor Manufacturing | Aspeed Technology vs. MediaTek | Aspeed Technology vs. United Microelectronics | Aspeed Technology vs. Novatek Microelectronics Corp |
| LARGAN Precision vs. MediaTek | LARGAN Precision vs. Hon Hai Precision | LARGAN Precision vs. Delta Electronics | LARGAN Precision vs. Catcher Technology Co |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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