Correlation Between Cub Elecparts and Greatek Electronics
Can any of the company-specific risk be diversified away by investing in both Cub Elecparts and Greatek 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 Cub Elecparts and Greatek Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cub Elecparts and Greatek Electronics, you can compare the effects of market volatilities on Cub Elecparts and Greatek 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 Cub Elecparts with a short position of Greatek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cub Elecparts and Greatek Electronics.
Diversification Opportunities for Cub Elecparts and Greatek Electronics
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cub and Greatek is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cub Elecparts and Greatek Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatek Electronics and Cub Elecparts 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 Cub Elecparts are associated (or correlated) with Greatek Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatek Electronics has no effect on the direction of Cub Elecparts i.e., Cub Elecparts and Greatek Electronics go up and down completely randomly.
Pair Corralation between Cub Elecparts and Greatek Electronics
Assuming the 90 days trading horizon Cub Elecparts is expected to generate 2.23 times more return on investment than Greatek Electronics. However, Cub Elecparts is 2.23 times more volatile than Greatek Electronics. It trades about 0.06 of its potential returns per unit of risk. Greatek Electronics is currently generating about -0.05 per unit of risk. If you would invest 9,710 in Cub Elecparts on August 31, 2024 and sell it today you would earn a total of 260.00 from holding Cub Elecparts or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cub Elecparts vs. Greatek Electronics
Performance |
| Timeline |
| Cub Elecparts |
| Greatek Electronics |
Cub Elecparts and Greatek Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cub Elecparts and Greatek Electronics
The main advantage of trading using opposite Cub Elecparts and Greatek Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cub Elecparts position performs unexpectedly, Greatek 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 Greatek Electronics will offset losses from the drop in Greatek Electronics' long position.| Cub Elecparts vs. Hota Industrial Mfg | Cub Elecparts vs. Eclat Textile Co | Cub Elecparts vs. Makalot Industrial Co | Cub Elecparts vs. King Slide Works |
| Greatek Electronics vs. United Microelectronics | Greatek Electronics vs. Winbond Electronics Corp | Greatek Electronics vs. Macronix International 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |