Correlation Between PChome Online and Asustek Computer
Can any of the company-specific risk be diversified away by investing in both PChome Online and Asustek Computer 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 PChome Online and Asustek Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PChome Online and Asustek Computer, you can compare the effects of market volatilities on PChome Online and Asustek Computer 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 PChome Online with a short position of Asustek Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of PChome Online and Asustek Computer.
Diversification Opportunities for PChome Online and Asustek Computer
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PChome and Asustek is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding PChome Online and Asustek Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asustek Computer and PChome Online 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 PChome Online are associated (or correlated) with Asustek Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asustek Computer has no effect on the direction of PChome Online i.e., PChome Online and Asustek Computer go up and down completely randomly.
Pair Corralation between PChome Online and Asustek Computer
Assuming the 90 days trading horizon PChome Online is expected to generate 2.53 times more return on investment than Asustek Computer. However, PChome Online is 2.53 times more volatile than Asustek Computer. It trades about 0.25 of its potential returns per unit of risk. Asustek Computer is currently generating about 0.12 per unit of risk. If you would invest 2,965 in PChome Online on September 12, 2024 and sell it today you would earn a total of 2,405 from holding PChome Online or generate 81.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PChome Online vs. Asustek Computer
Performance |
| Timeline |
| PChome Online |
| Asustek Computer |
PChome Online and Asustek Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PChome Online and Asustek Computer
The main advantage of trading using opposite PChome Online and Asustek Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PChome Online position performs unexpectedly, Asustek Computer 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 Asustek Computer will offset losses from the drop in Asustek Computer's long position.| PChome Online vs. President Chain Store | PChome Online vs. Uni President Enterprises Corp | PChome Online vs. Eclat Textile Co | PChome Online vs. Ruentex Development Co |
| Asustek Computer vs. AU Optronics | Asustek Computer vs. Innolux Corp | Asustek Computer vs. Ruentex Development Co | Asustek Computer vs. WiseChip Semiconductor |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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