Correlation Between Compeq Manufacturing and Info Tek
Can any of the company-specific risk be diversified away by investing in both Compeq Manufacturing and Info Tek 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 Info Tek 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 Info Tek, you can compare the effects of market volatilities on Compeq Manufacturing and Info Tek 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 Info Tek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compeq Manufacturing and Info Tek.
Diversification Opportunities for Compeq Manufacturing and Info Tek
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compeq and Info is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Compeq Manufacturing Co and Info Tek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Info Tek 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 Info Tek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Info Tek has no effect on the direction of Compeq Manufacturing i.e., Compeq Manufacturing and Info Tek go up and down completely randomly.
Pair Corralation between Compeq Manufacturing and Info Tek
Assuming the 90 days trading horizon Compeq Manufacturing Co is expected to generate 1.02 times more return on investment than Info Tek. However, Compeq Manufacturing is 1.02 times more volatile than Info Tek. It trades about 0.06 of its potential returns per unit of risk. Info Tek is currently generating about -0.04 per unit of risk. If you would invest 6,470 in Compeq Manufacturing Co on September 12, 2024 and sell it today you would earn a total of 120.00 from holding Compeq Manufacturing Co or generate 1.85% 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. Info Tek
Performance |
| Timeline |
| Compeq Manufacturing |
| Info Tek |
Compeq Manufacturing and Info Tek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compeq Manufacturing and Info Tek
The main advantage of trading using opposite Compeq Manufacturing and Info Tek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compeq Manufacturing position performs unexpectedly, Info Tek 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 Info Tek will offset losses from the drop in Info Tek's long position.| Compeq Manufacturing vs. AU Optronics | Compeq Manufacturing vs. Innolux Corp | Compeq Manufacturing vs. Ruentex Development Co | Compeq Manufacturing vs. WiseChip Semiconductor |
| Info Tek vs. Compeq Manufacturing Co | Info Tek vs. Global Brands Manufacture | Info Tek vs. HannStar Board Corp | Info Tek vs. Taiwan Hopax Chemsistry |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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