Correlation Between Aspeed Technology and Apacer Technology

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

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

Diversification Opportunities for Aspeed Technology and Apacer Technology

0.11

Correlation Coefficient

Aspeed Technology  Apacer Technology

Average diversification

The 3 months correlation between Aspeed and Apacer is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Aspeed Technology and Apacer Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apacer Technology 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 Apacer Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apacer Technology has no effect on the direction of Aspeed Technology i.e., Aspeed Technology and Apacer Technology go up and down completely randomly.

Pair Corralation between Aspeed Technology and Apacer Technology

Assuming the 90 days trading horizon Aspeed Technology is expected to under-perform the Apacer Technology. In addition to that, Aspeed Technology is 2.19 times more volatile than Apacer Technology. It trades about -0.01 of its total potential returns per unit of risk. Apacer Technology is currently generating about 0.1 per unit of volatility. If you would invest  4,515  in Apacer Technology on December 30, 2024 and sell it today you would earn a total of  365.00  from holding Apacer Technology or generate 8.08% return on investment over 90 days.

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

Aspeed Technology  vs.  Apacer Technology

Aspeed Technology

Risk-Adjusted Performance

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 fairly stable basic indicators, Aspeed Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Apacer Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apacer Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Apacer Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aspeed Technology and Apacer Technology

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

The idea behind Aspeed Technology and Apacer Technology 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.