Correlation Between Camellia Metal and Elitegroup Computer
Can any of the company-specific risk be diversified away by investing in both Camellia Metal and Elitegroup 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 Camellia Metal and Elitegroup Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camellia Metal Co and Elitegroup Computer Systems, you can compare the effects of market volatilities on Camellia Metal and Elitegroup 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 Camellia Metal with a short position of Elitegroup Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camellia Metal and Elitegroup Computer.
Diversification Opportunities for Camellia Metal and Elitegroup Computer
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Camellia and Elitegroup is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Camellia Metal Co and Elitegroup Computer Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elitegroup Computer and Camellia Metal 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 Camellia Metal Co are associated (or correlated) with Elitegroup Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elitegroup Computer has no effect on the direction of Camellia Metal i.e., Camellia Metal and Elitegroup Computer go up and down completely randomly.
Pair Corralation between Camellia Metal and Elitegroup Computer
Assuming the 90 days trading horizon Camellia Metal Co is expected to generate 0.75 times more return on investment than Elitegroup Computer. However, Camellia Metal Co is 1.33 times less risky than Elitegroup Computer. It trades about 0.03 of its potential returns per unit of risk. Elitegroup Computer Systems is currently generating about -0.15 per unit of risk. If you would invest 1,475 in Camellia Metal Co on October 25, 2024 and sell it today you would earn a total of 15.00 from holding Camellia Metal Co or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camellia Metal Co vs. Elitegroup Computer Systems
Performance |
| Timeline |
| Camellia Metal |
| Elitegroup Computer |
Camellia Metal and Elitegroup Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camellia Metal and Elitegroup Computer
The main advantage of trading using opposite Camellia Metal and Elitegroup Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camellia Metal position performs unexpectedly, Elitegroup 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 Elitegroup Computer will offset losses from the drop in Elitegroup Computer's long position.| Camellia Metal vs. Catcher Technology Co | Camellia Metal vs. Solar Applied Materials | Camellia Metal vs. Evergreen Steel Corp | Camellia Metal vs. Shin Zu Shing |
| Elitegroup Computer vs. Unimicron Technology Corp | Elitegroup Computer vs. Kinsus Interconnect Technology | Elitegroup Computer vs. Novatek Microelectronics Corp | Elitegroup Computer vs. Delta Electronics |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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