Correlation Between Aspeed Technology and Tung Thih
Can any of the company-specific risk be diversified away by investing in both Aspeed Technology and Tung Thih 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 Tung Thih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspeed Technology and Tung Thih Electronic, you can compare the effects of market volatilities on Aspeed Technology and Tung Thih 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 Tung Thih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspeed Technology and Tung Thih.
Diversification Opportunities for Aspeed Technology and Tung Thih
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aspeed and Tung is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aspeed Technology and Tung Thih Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tung Thih Electronic 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 Tung Thih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tung Thih Electronic has no effect on the direction of Aspeed Technology i.e., Aspeed Technology and Tung Thih go up and down completely randomly.
Pair Corralation between Aspeed Technology and Tung Thih
Assuming the 90 days trading horizon Aspeed Technology is expected to under-perform the Tung Thih. But the stock apears to be less risky and, when comparing its historical volatility, Aspeed Technology is 1.16 times less risky than Tung Thih. The stock trades about -0.05 of its potential returns per unit of risk. The Tung Thih Electronic is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9,970 in Tung Thih Electronic on August 31, 2024 and sell it today you would lose (120.00) from holding Tung Thih Electronic or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspeed Technology vs. Tung Thih Electronic
Performance |
| Timeline |
| Aspeed Technology |
| Tung Thih Electronic |
Aspeed Technology and Tung Thih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspeed Technology and Tung Thih
The main advantage of trading using opposite Aspeed Technology and Tung Thih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspeed Technology position performs unexpectedly, Tung Thih 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 Tung Thih will offset losses from the drop in Tung Thih's long position.| Aspeed Technology vs. Taiwan Semiconductor Manufacturing | Aspeed Technology vs. MediaTek | Aspeed Technology vs. United Microelectronics | Aspeed Technology vs. Novatek Microelectronics Corp |
| Tung Thih vs. Hota Industrial Mfg | Tung Thih vs. BizLink Holding | Tung Thih vs. Cub Elecparts | Tung Thih vs. Hu Lane Associate |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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