Correlation Between In Win and ASRock
Can any of the company-specific risk be diversified away by investing in both In Win and ASRock 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 In Win and ASRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between In Win Development and ASRock Inc, you can compare the effects of market volatilities on In Win and ASRock 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 In Win with a short position of ASRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of In Win and ASRock.
Diversification Opportunities for In Win and ASRock
Good diversification
The 3 months correlation between 6117 and ASRock is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding In Win Development and ASRock Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASRock Inc and In Win 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 In Win Development are associated (or correlated) with ASRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASRock Inc has no effect on the direction of In Win i.e., In Win and ASRock go up and down completely randomly.
Pair Corralation between In Win and ASRock
Assuming the 90 days trading horizon In Win Development is expected to under-perform the ASRock. In addition to that, In Win is 1.31 times more volatile than ASRock Inc. It trades about -0.07 of its total potential returns per unit of risk. ASRock Inc is currently generating about 0.01 per unit of volatility. If you would invest 24,250 in ASRock Inc on September 1, 2024 and sell it today you would lose (650.00) from holding ASRock Inc or give up 2.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
In Win Development vs. ASRock Inc
Performance |
| Timeline |
| In Win Development |
| ASRock Inc |
In Win and ASRock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with In Win and ASRock
The main advantage of trading using opposite In Win and ASRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if In Win position performs unexpectedly, ASRock 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 ASRock will offset losses from the drop in ASRock's long position.The idea behind In Win Development and ASRock Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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