Correlation Between Aspeed Technology and XAC Automation
Can any of the company-specific risk be diversified away by investing in both Aspeed Technology and XAC Automation 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 XAC Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspeed Technology and XAC Automation, you can compare the effects of market volatilities on Aspeed Technology and XAC Automation 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 XAC Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspeed Technology and XAC Automation.
Diversification Opportunities for Aspeed Technology and XAC Automation
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aspeed and XAC is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aspeed Technology and XAC Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XAC Automation 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 XAC Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XAC Automation has no effect on the direction of Aspeed Technology i.e., Aspeed Technology and XAC Automation go up and down completely randomly.
Pair Corralation between Aspeed Technology and XAC Automation
Assuming the 90 days trading horizon Aspeed Technology is expected to generate 1.43 times more return on investment than XAC Automation. However, Aspeed Technology is 1.43 times more volatile than XAC Automation. It trades about 0.05 of its potential returns per unit of risk. XAC Automation is currently generating about 0.03 per unit of risk. If you would invest 285,299 in Aspeed Technology on September 14, 2024 and sell it today you would earn a total of 101,201 from holding Aspeed Technology or generate 35.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspeed Technology vs. XAC Automation
Performance |
| Timeline |
| Aspeed Technology |
| XAC Automation |
Aspeed Technology and XAC Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspeed Technology and XAC Automation
The main advantage of trading using opposite Aspeed Technology and XAC Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspeed Technology position performs unexpectedly, XAC Automation 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 XAC Automation will offset losses from the drop in XAC Automation's long position.| Aspeed Technology vs. Asmedia Technology | Aspeed Technology vs. Silergy Corp | Aspeed Technology vs. Parade Technologies | Aspeed Technology vs. Wiwynn Corp |
| XAC Automation vs. Shuang Bang Industrial | XAC Automation vs. Lian Hwa Foods | XAC Automation vs. Powertech Industrial Co | XAC Automation vs. International CSRC Investment |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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