Correlation Between YuantaP Shares and Compal Electronics
Can any of the company-specific risk be diversified away by investing in both YuantaP Shares and Compal Electronics 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 YuantaP Shares and Compal Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YuantaP shares Taiwan Electronics and Compal Electronics, you can compare the effects of market volatilities on YuantaP Shares and Compal Electronics 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 YuantaP Shares with a short position of Compal Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of YuantaP Shares and Compal Electronics.
Diversification Opportunities for YuantaP Shares and Compal Electronics
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YuantaP and Compal is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding YuantaP shares Taiwan Electron and Compal Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compal Electronics and YuantaP Shares 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 YuantaP shares Taiwan Electronics are associated (or correlated) with Compal Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compal Electronics has no effect on the direction of YuantaP Shares i.e., YuantaP Shares and Compal Electronics go up and down completely randomly.
Pair Corralation between YuantaP Shares and Compal Electronics
Assuming the 90 days trading horizon YuantaP shares Taiwan Electronics is expected to under-perform the Compal Electronics. But the etf apears to be less risky and, when comparing its historical volatility, YuantaP shares Taiwan Electronics is 1.52 times less risky than Compal Electronics. The etf trades about -0.17 of its potential returns per unit of risk. The Compal Electronics is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,600 in Compal Electronics on August 30, 2024 and sell it today you would earn a total of 160.00 from holding Compal Electronics or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YuantaP shares Taiwan Electron vs. Compal Electronics
Performance |
| Timeline |
| YuantaP shares Taiwan |
| Compal Electronics |
YuantaP Shares and Compal Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YuantaP Shares and Compal Electronics
The main advantage of trading using opposite YuantaP Shares and Compal Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YuantaP Shares position performs unexpectedly, Compal Electronics 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 Compal Electronics will offset losses from the drop in Compal Electronics' long position.| YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Symtek Automation Asia | YuantaP Shares vs. CTCI Corp | YuantaP Shares vs. Information Technology Total |
| Compal Electronics vs. Quanta Computer | Compal Electronics vs. Inventec Corp | Compal Electronics vs. Asustek Computer | Compal Electronics vs. Acer Inc |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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