Correlation Between Compeq Manufacturing and Pan International
Can any of the company-specific risk be diversified away by investing in both Compeq Manufacturing and Pan International 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 Compeq Manufacturing and Pan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compeq Manufacturing Co and Pan International Industrial Corp, you can compare the effects of market volatilities on Compeq Manufacturing and Pan International 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 Compeq Manufacturing with a short position of Pan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compeq Manufacturing and Pan International.
Diversification Opportunities for Compeq Manufacturing and Pan International
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compeq and Pan is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Compeq Manufacturing Co and Pan International Industrial C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan International and Compeq Manufacturing 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 Compeq Manufacturing Co are associated (or correlated) with Pan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan International has no effect on the direction of Compeq Manufacturing i.e., Compeq Manufacturing and Pan International go up and down completely randomly.
Pair Corralation between Compeq Manufacturing and Pan International
Assuming the 90 days trading horizon Compeq Manufacturing Co is expected to generate 0.7 times more return on investment than Pan International. However, Compeq Manufacturing Co is 1.43 times less risky than Pan International. It trades about -0.04 of its potential returns per unit of risk. Pan International Industrial Corp is currently generating about -0.17 per unit of risk. If you would invest 6,470 in Compeq Manufacturing Co on September 12, 2024 and sell it today you would lose (100.00) from holding Compeq Manufacturing Co or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compeq Manufacturing Co vs. Pan International Industrial C
Performance |
| Timeline |
| Compeq Manufacturing |
| Pan International |
Compeq Manufacturing and Pan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compeq Manufacturing and Pan International
The main advantage of trading using opposite Compeq Manufacturing and Pan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compeq Manufacturing position performs unexpectedly, Pan International 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 Pan International will offset losses from the drop in Pan International's long position.| Compeq Manufacturing vs. AU Optronics | Compeq Manufacturing vs. Innolux Corp | Compeq Manufacturing vs. Ruentex Development Co | Compeq Manufacturing vs. WiseChip Semiconductor |
| Pan International vs. Hunya Foods Co | Pan International vs. Hi Lai Foods Co | Pan International vs. Sunspring Metal Corp | Pan International vs. Lian Hwa Foods |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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