Correlation Between Compeq Manufacturing and Quanta Computer
Can any of the company-specific risk be diversified away by investing in both Compeq Manufacturing and Quanta 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 Compeq Manufacturing and Quanta Computer 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 Quanta Computer, you can compare the effects of market volatilities on Compeq Manufacturing and Quanta 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 Compeq Manufacturing with a short position of Quanta Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compeq Manufacturing and Quanta Computer.
Diversification Opportunities for Compeq Manufacturing and Quanta Computer
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compeq and Quanta is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Compeq Manufacturing Co and Quanta Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanta Computer 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 Quanta Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanta Computer has no effect on the direction of Compeq Manufacturing i.e., Compeq Manufacturing and Quanta Computer go up and down completely randomly.
Pair Corralation between Compeq Manufacturing and Quanta Computer
Assuming the 90 days trading horizon Compeq Manufacturing is expected to generate 2.18 times less return on investment than Quanta Computer. But when comparing it to its historical volatility, Compeq Manufacturing Co is 1.34 times less risky than Quanta Computer. It trades about 0.09 of its potential returns per unit of risk. Quanta Computer is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 24,300 in Quanta Computer on November 28, 2024 and sell it today you would earn a total of 1,150 from holding Quanta Computer or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compeq Manufacturing Co vs. Quanta Computer
Performance |
| Timeline |
| Compeq Manufacturing |
| Quanta Computer |
Compeq Manufacturing and Quanta Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compeq Manufacturing and Quanta Computer
The main advantage of trading using opposite Compeq Manufacturing and Quanta Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compeq Manufacturing position performs unexpectedly, Quanta 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 Quanta Computer will offset losses from the drop in Quanta Computer's long position.| Compeq Manufacturing vs. Compal Electronics | Compeq Manufacturing vs. Winbond Electronics Corp | Compeq Manufacturing vs. Qisda Corp | Compeq Manufacturing vs. Macronix International Co |
| Quanta Computer vs. Compal Electronics | Quanta Computer vs. Asustek Computer | Quanta Computer vs. Delta Electronics | Quanta Computer vs. Inventec Corp |
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 Directory module to find actively traded commodities issued by global exchanges.
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