Correlation Between Ju Teng and Asustek Computer

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

By analyzing existing cross correlation between Ju Teng International and Asustek Computer, you can compare the effects of market volatilities on Ju Teng and Asustek Computer 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 Ju Teng with a short position of Asustek Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ju Teng and Asustek Computer.

Diversification Opportunities for Ju Teng and Asustek Computer

0.23

Correlation Coefficient

Ju Teng  Asustek Computer

Modest diversification

The 3 months correlation between 9136 and Asustek is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ju Teng International and Asustek Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asustek Computer and Ju Teng 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 Ju Teng International are associated (or correlated) with Asustek Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asustek Computer has no effect on the direction of Ju Teng i.e., Ju Teng and Asustek Computer go up and down completely randomly.

Pair Corralation between Ju Teng and Asustek Computer

Assuming the 90 days trading horizon Ju Teng International is expected to generate 1.14 times more return on investment than Asustek Computer. However, Ju Teng is 1.14 times more volatile than Asustek Computer. It trades about 0.22 of its potential returns per unit of risk. Asustek Computer is currently generating about 0.06 per unit of risk. If you would invest  609.00  in Ju Teng International on December 22, 2024 and sell it today you would earn a total of  203.00  from holding Ju Teng International or generate 33.33% return on investment over 90 days.

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

Ju Teng International  vs.  Asustek Computer

Ju Teng International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ju Teng International are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Ju Teng showed solid returns over the last few months and may actually be approaching a breakup point.

Asustek Computer

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asustek Computer are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Asustek Computer may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ju Teng and Asustek Computer

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

The idea behind Ju Teng International and Asustek Computer 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.