Correlation Between ASRock and Ko Ja

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

By analyzing existing cross correlation between ASRock Inc and Ko Ja Cayman, you can compare the effects of market volatilities on ASRock and Ko Ja 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 ASRock with a short position of Ko Ja. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASRock and Ko Ja.

Diversification Opportunities for ASRock and Ko Ja

0.33

Correlation Coefficient

ASRock  Ko Ja

Weak diversification

The 3 months correlation between ASRock and 5215 is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding ASRock Inc and Ko Ja Cayman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ko Ja Cayman and ASRock 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 ASRock Inc are associated (or correlated) with Ko Ja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ko Ja Cayman has no effect on the direction of ASRock i.e., ASRock and Ko Ja go up and down completely randomly.

Pair Corralation between ASRock and Ko Ja

Assuming the 90 days trading horizon ASRock Inc is expected to under-perform the Ko Ja. In addition to that, ASRock is 2.28 times more volatile than Ko Ja Cayman. It trades about -0.06 of its total potential returns per unit of risk. Ko Ja Cayman is currently generating about -0.03 per unit of volatility. If you would invest  4,570  in Ko Ja Cayman on December 27, 2024 and sell it today you would lose (125.00) from holding Ko Ja Cayman or give up 2.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ASRock Inc  vs.  Ko Ja Cayman

ASRock Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASRock Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Ko Ja Cayman

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ko Ja Cayman has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Ko Ja is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with ASRock and Ko Ja

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

The idea behind ASRock Inc and Ko Ja Cayman 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 Commodity Directory module to find actively traded commodities issued by global exchanges.