Correlation Between DingZing Advanced and Asia Electronic
Can any of the company-specific risk be diversified away by investing in both DingZing Advanced and Asia Electronic 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 DingZing Advanced and Asia Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DingZing Advanced Materials and Asia Electronic Material, you can compare the effects of market volatilities on DingZing Advanced and Asia Electronic 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 DingZing Advanced with a short position of Asia Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of DingZing Advanced and Asia Electronic.
Diversification Opportunities for DingZing Advanced and Asia Electronic
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DingZing and Asia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DingZing Advanced Materials and Asia Electronic Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Electronic Material and DingZing Advanced 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 DingZing Advanced Materials are associated (or correlated) with Asia Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Electronic Material has no effect on the direction of DingZing Advanced i.e., DingZing Advanced and Asia Electronic go up and down completely randomly.
Pair Corralation between DingZing Advanced and Asia Electronic
Assuming the 90 days trading horizon DingZing Advanced Materials is expected to generate 2.77 times more return on investment than Asia Electronic. However, DingZing Advanced is 2.77 times more volatile than Asia Electronic Material. It trades about 0.14 of its potential returns per unit of risk. Asia Electronic Material is currently generating about 0.05 per unit of risk. If you would invest 14,650 in DingZing Advanced Materials on December 14, 2024 and sell it today you would earn a total of 1,600 from holding DingZing Advanced Materials or generate 10.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DingZing Advanced Materials vs. Asia Electronic Material
Performance |
| Timeline |
| DingZing Advanced |
| Asia Electronic Material |
DingZing Advanced and Asia Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DingZing Advanced and Asia Electronic
The main advantage of trading using opposite DingZing Advanced and Asia Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DingZing Advanced position performs unexpectedly, Asia Electronic 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 Asia Electronic will offset losses from the drop in Asia Electronic's long position.| DingZing Advanced vs. Lelon Electronics Corp | ||
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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