Correlation Between Asustek Computer and KS Terminals
Can any of the company-specific risk be diversified away by investing in both Asustek Computer and KS Terminals 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 Asustek Computer and KS Terminals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asustek Computer and KS Terminals, you can compare the effects of market volatilities on Asustek Computer and KS Terminals 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 Asustek Computer with a short position of KS Terminals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asustek Computer and KS Terminals.
Diversification Opportunities for Asustek Computer and KS Terminals
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asustek and 3003 is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Asustek Computer and KS Terminals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KS Terminals and Asustek Computer 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 Asustek Computer are associated (or correlated) with KS Terminals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KS Terminals has no effect on the direction of Asustek Computer i.e., Asustek Computer and KS Terminals go up and down completely randomly.
Pair Corralation between Asustek Computer and KS Terminals
Assuming the 90 days trading horizon Asustek Computer is expected to generate 0.91 times more return on investment than KS Terminals. However, Asustek Computer is 1.1 times less risky than KS Terminals. It trades about 0.1 of its potential returns per unit of risk. KS Terminals is currently generating about 0.02 per unit of risk. If you would invest 48,555 in Asustek Computer on September 25, 2024 and sell it today you would earn a total of 12,945 from holding Asustek Computer or generate 26.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Asustek Computer vs. KS Terminals
Performance |
Timeline |
Asustek Computer |
KS Terminals |
Asustek Computer and KS Terminals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Asustek Computer and KS Terminals
The main advantage of trading using opposite Asustek Computer and KS Terminals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asustek Computer position performs unexpectedly, KS Terminals 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 KS Terminals will offset losses from the drop in KS Terminals' long position.Asustek Computer vs. Century Wind Power | Asustek Computer vs. Green World Fintech | Asustek Computer vs. Ingentec | Asustek Computer vs. Chaheng Precision Co |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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