Correlation Between Compeq Manufacturing and Career Technology
Can any of the company-specific risk be diversified away by investing in both Compeq Manufacturing and Career Technology 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 Career Technology 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 Career Technology MFG, you can compare the effects of market volatilities on Compeq Manufacturing and Career Technology 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 Career Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compeq Manufacturing and Career Technology.
Diversification Opportunities for Compeq Manufacturing and Career Technology
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compeq and Career is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Compeq Manufacturing Co and Career Technology MFG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Career Technology MFG 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 Career Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Career Technology MFG has no effect on the direction of Compeq Manufacturing i.e., Compeq Manufacturing and Career Technology go up and down completely randomly.
Pair Corralation between Compeq Manufacturing and Career Technology
Assuming the 90 days trading horizon Compeq Manufacturing is expected to generate 3.16 times less return on investment than Career Technology. But when comparing it to its historical volatility, Compeq Manufacturing Co is 2.43 times less risky than Career Technology. It trades about 0.16 of its potential returns per unit of risk. Career Technology MFG is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,455 in Career Technology MFG on November 28, 2024 and sell it today you would earn a total of 190.00 from holding Career Technology MFG or generate 13.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Compeq Manufacturing Co vs. Career Technology MFG
Performance |
| Timeline |
| Compeq Manufacturing |
| Career Technology MFG |
Compeq Manufacturing and Career Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compeq Manufacturing and Career Technology
The main advantage of trading using opposite Compeq Manufacturing and Career Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compeq Manufacturing position performs unexpectedly, Career Technology 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 Career Technology will offset losses from the drop in Career Technology'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 |
| Career Technology vs. Flexium Interconnect | Career Technology vs. Compeq Manufacturing Co | Career Technology vs. Unimicron Technology Corp | Career Technology vs. Tripod Technology 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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