Correlation Between Top Union and Ablerex Electronics
Can any of the company-specific risk be diversified away by investing in both Top Union and Ablerex Electronics 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 Top Union and Ablerex Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top Union Electronics and Ablerex Electronics Co, you can compare the effects of market volatilities on Top Union and Ablerex Electronics 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 Top Union with a short position of Ablerex Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top Union and Ablerex Electronics.
Diversification Opportunities for Top Union and Ablerex Electronics
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Top and Ablerex is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Top Union Electronics and Ablerex Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ablerex Electronics and Top Union 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 Top Union Electronics are associated (or correlated) with Ablerex Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ablerex Electronics has no effect on the direction of Top Union i.e., Top Union and Ablerex Electronics go up and down completely randomly.
Pair Corralation between Top Union and Ablerex Electronics
Assuming the 90 days trading horizon Top Union is expected to generate 4.6 times less return on investment than Ablerex Electronics. But when comparing it to its historical volatility, Top Union Electronics is 3.31 times less risky than Ablerex Electronics. It trades about 0.13 of its potential returns per unit of risk. Ablerex Electronics Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 4,115 in Ablerex Electronics Co on August 31, 2024 and sell it today you would earn a total of 620.00 from holding Ablerex Electronics Co or generate 15.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Top Union Electronics vs. Ablerex Electronics Co
Performance |
| Timeline |
| Top Union Electronics |
| Ablerex Electronics |
Top Union and Ablerex Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top Union and Ablerex Electronics
The main advantage of trading using opposite Top Union and Ablerex Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top Union position performs unexpectedly, Ablerex Electronics 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 Ablerex Electronics will offset losses from the drop in Ablerex Electronics' long position.| Top Union vs. Sino American Silicon Products | Top Union vs. Powertech Technology | Top Union vs. Formosa Sumco Technology | Top Union vs. Radiant Opto Electronics Corp |
| Ablerex Electronics vs. Huang Hsiang Construction | Ablerex Electronics vs. Highwealth Construction Corp | Ablerex Electronics vs. Kindom Construction Corp | Ablerex Electronics vs. Hung Sheng Construction |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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