Correlation Between Aspeed Technology and Edom Technology
Can any of the company-specific risk be diversified away by investing in both Aspeed Technology and Edom Technology 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 Edom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspeed Technology and Edom Technology Co, you can compare the effects of market volatilities on Aspeed Technology and Edom Technology 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 Edom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspeed Technology and Edom Technology.
Diversification Opportunities for Aspeed Technology and Edom Technology
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aspeed and Edom is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aspeed Technology and Edom Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edom Technology 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 Edom Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edom Technology has no effect on the direction of Aspeed Technology i.e., Aspeed Technology and Edom Technology go up and down completely randomly.
Pair Corralation between Aspeed Technology and Edom Technology
Assuming the 90 days trading horizon Aspeed Technology is expected to generate 1.43 times more return on investment than Edom Technology. However, Aspeed Technology is 1.43 times more volatile than Edom Technology Co. It trades about 0.07 of its potential returns per unit of risk. Edom Technology Co is currently generating about 0.02 per unit of risk. If you would invest 177,699 in Aspeed Technology on September 12, 2024 and sell it today you would earn a total of 214,801 from holding Aspeed Technology or generate 120.88% 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. Edom Technology Co
Performance |
| Timeline |
| Aspeed Technology |
| Edom Technology |
Aspeed Technology and Edom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspeed Technology and Edom Technology
The main advantage of trading using opposite Aspeed Technology and Edom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspeed Technology position performs unexpectedly, Edom Technology 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 Edom Technology will offset losses from the drop in Edom Technology's long position.| Aspeed Technology vs. WIN Semiconductors | Aspeed Technology vs. GlobalWafers Co | Aspeed Technology vs. Novatek Microelectronics Corp | Aspeed Technology vs. Ruentex Development Co |
| Edom Technology vs. Altek Corp | Edom Technology vs. ALi Corp | Edom Technology vs. Leader Electronics | Edom Technology vs. Spirox 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 CEOs Directory module to screen CEOs from public companies around the world.
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