Correlation Between Asustek Computer and Jentech Precision

Can any of the company-specific risk be diversified away by investing in both Asustek Computer and Jentech Precision 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 Jentech Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asustek Computer and Jentech Precision Industrial, you can compare the effects of market volatilities on Asustek Computer and Jentech Precision 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 Jentech Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asustek Computer and Jentech Precision.

Diversification Opportunities for Asustek Computer and Jentech Precision

-0.08

Correlation Coefficient

Asustek Computer  Jentech Precision

Good diversification

The 3 months correlation between Asustek and Jentech is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Asustek Computer and Jentech Precision Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jentech Precision 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 Jentech Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jentech Precision has no effect on the direction of Asustek Computer i.e., Asustek Computer and Jentech Precision go up and down completely randomly.

Pair Corralation between Asustek Computer and Jentech Precision

Assuming the 90 days trading horizon Asustek Computer is expected to generate 0.57 times more return on investment than Jentech Precision. However, Asustek Computer is 1.76 times less risky than Jentech Precision. It trades about 0.04 of its potential returns per unit of risk. Jentech Precision Industrial is currently generating about -0.15 per unit of risk. If you would invest  61,700  in Asustek Computer on December 29, 2024 and sell it today you would earn a total of  2,500  from holding Asustek Computer or generate 4.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Asustek Computer  vs.  Jentech Precision Industrial

Asustek Computer

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asustek Computer are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Asustek Computer is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Jentech Precision

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jentech Precision Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Asustek Computer and Jentech Precision

The main advantage of trading using opposite Asustek Computer and Jentech Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asustek Computer position performs unexpectedly, Jentech Precision 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 Jentech Precision will offset losses from the drop in Jentech Precision's long position.

The idea behind Asustek Computer and Jentech Precision Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.