Correlation Between Aspeed Technology and King Chou

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

By analyzing existing cross correlation between Aspeed Technology and King Chou Marine, you can compare the effects of market volatilities on Aspeed Technology and King Chou 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 Aspeed Technology with a short position of King Chou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspeed Technology and King Chou.

Diversification Opportunities for Aspeed Technology and King Chou

-0.7

Correlation Coefficient

Aspeed Technology  King Chou

Excellent diversification

The 3 months correlation between Aspeed and King is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Aspeed Technology and King Chou Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on King Chou Marine and Aspeed Technology 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 Aspeed Technology are associated (or correlated) with King Chou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of King Chou Marine has no effect on the direction of Aspeed Technology i.e., Aspeed Technology and King Chou go up and down completely randomly.

Pair Corralation between Aspeed Technology and King Chou

Assuming the 90 days trading horizon Aspeed Technology is expected to generate 5.11 times more return on investment than King Chou. However, Aspeed Technology is 5.11 times more volatile than King Chou Marine. It trades about 0.05 of its potential returns per unit of risk. King Chou Marine is currently generating about 0.06 per unit of risk. If you would invest  211,476  in Aspeed Technology on October 23, 2024 and sell it today you would earn a total of  156,024  from holding Aspeed Technology or generate 73.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Aspeed Technology  vs.  King Chou Marine

Aspeed Technology

Risk-Adjusted Performance

0 of 100

Very Weak

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

King Chou Marine

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in King Chou Marine are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, King Chou 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 Aspeed Technology and King Chou

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

The idea behind Aspeed Technology and King Chou Marine 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.