Correlation Between FIH MOBILE and ASPEN TECHINC
Can any of the company-specific risk be diversified away by investing in both FIH MOBILE and ASPEN TECHINC 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 FIH MOBILE and ASPEN TECHINC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIH MOBILE and ASPEN TECHINC DL, you can compare the effects of market volatilities on FIH MOBILE and ASPEN TECHINC 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 FIH MOBILE with a short position of ASPEN TECHINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIH MOBILE and ASPEN TECHINC.
Diversification Opportunities for FIH MOBILE and ASPEN TECHINC
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FIH and ASPEN is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding FIH MOBILE and ASPEN TECHINC DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASPEN TECHINC DL and FIH MOBILE 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 FIH MOBILE are associated (or correlated) with ASPEN TECHINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASPEN TECHINC DL has no effect on the direction of FIH MOBILE i.e., FIH MOBILE and ASPEN TECHINC go up and down completely randomly.
Pair Corralation between FIH MOBILE and ASPEN TECHINC
Assuming the 90 days trading horizon FIH MOBILE is expected to generate 2.56 times less return on investment than ASPEN TECHINC. But when comparing it to its historical volatility, FIH MOBILE is 1.62 times less risky than ASPEN TECHINC. It trades about 0.02 of its potential returns per unit of risk. ASPEN TECHINC DL is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 17,723 in ASPEN TECHINC DL on October 16, 2024 and sell it today you would earn a total of 6,477 from holding ASPEN TECHINC DL or generate 36.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
FIH MOBILE vs. ASPEN TECHINC DL
Performance |
| Timeline |
| FIH MOBILE |
| ASPEN TECHINC DL |
FIH MOBILE and ASPEN TECHINC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIH MOBILE and ASPEN TECHINC
The main advantage of trading using opposite FIH MOBILE and ASPEN TECHINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIH MOBILE position performs unexpectedly, ASPEN TECHINC 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 ASPEN TECHINC will offset losses from the drop in ASPEN TECHINC's long position.| FIH MOBILE vs. Sunny Optical Technology | FIH MOBILE vs. Wayside Technology Group | FIH MOBILE vs. Calibre Mining Corp | FIH MOBILE vs. Perseus Mining Limited |
| ASPEN TECHINC vs. FIH MOBILE | ASPEN TECHINC vs. Vishay Intertechnology | ASPEN TECHINC vs. SCOTT TECHNOLOGY | ASPEN TECHINC vs. Align Technology |
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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