Correlation Between Asia Optical and Topoint Technology
Can any of the company-specific risk be diversified away by investing in both Asia Optical and Topoint 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 Asia Optical and Topoint Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Optical Co and Topoint Technology Co, you can compare the effects of market volatilities on Asia Optical and Topoint 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 Asia Optical with a short position of Topoint Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Optical and Topoint Technology.
Diversification Opportunities for Asia Optical and Topoint Technology
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asia and Topoint is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Asia Optical Co and Topoint Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topoint Technology and Asia Optical 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 Asia Optical Co are associated (or correlated) with Topoint Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topoint Technology has no effect on the direction of Asia Optical i.e., Asia Optical and Topoint Technology go up and down completely randomly.
Pair Corralation between Asia Optical and Topoint Technology
Assuming the 90 days trading horizon Asia Optical Co is expected to generate 1.17 times more return on investment than Topoint Technology. However, Asia Optical is 1.17 times more volatile than Topoint Technology Co. It trades about 0.1 of its potential returns per unit of risk. Topoint Technology Co is currently generating about 0.03 per unit of risk. If you would invest 6,100 in Asia Optical Co on September 23, 2024 and sell it today you would earn a total of 10,250 from holding Asia Optical Co or generate 168.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.79% |
Values | Daily Returns |
Asia Optical Co vs. Topoint Technology Co
Performance |
Timeline |
Asia Optical |
Topoint Technology |
Asia Optical and Topoint Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Asia Optical and Topoint Technology
The main advantage of trading using opposite Asia Optical and Topoint Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Optical position performs unexpectedly, Topoint 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 Topoint Technology will offset losses from the drop in Topoint Technology's long position.Asia Optical vs. Century Wind Power | Asia Optical vs. Green World Fintech | Asia Optical vs. Ingentec | Asia Optical vs. Chaheng Precision Co |
Topoint Technology vs. Century Wind Power | Topoint Technology vs. Green World Fintech | Topoint Technology vs. Ingentec | Topoint Technology vs. Chaheng Precision Co |
Check out your portfolio center.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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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