Correlation Between Compal Electronics and Mosel Vitelic
Can any of the company-specific risk be diversified away by investing in both Compal Electronics and Mosel Vitelic 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 Compal Electronics and Mosel Vitelic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compal Electronics and Mosel Vitelic, you can compare the effects of market volatilities on Compal Electronics and Mosel Vitelic 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 Compal Electronics with a short position of Mosel Vitelic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and Mosel Vitelic.
Diversification Opportunities for Compal Electronics and Mosel Vitelic
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Compal and Mosel is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics and Mosel Vitelic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosel Vitelic and Compal Electronics 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 Compal Electronics are associated (or correlated) with Mosel Vitelic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosel Vitelic has no effect on the direction of Compal Electronics i.e., Compal Electronics and Mosel Vitelic go up and down completely randomly.
Pair Corralation between Compal Electronics and Mosel Vitelic
Assuming the 90 days trading horizon Compal Electronics is expected to generate 1.99 times less return on investment than Mosel Vitelic. But when comparing it to its historical volatility, Compal Electronics is 1.17 times less risky than Mosel Vitelic. It trades about 0.08 of its potential returns per unit of risk. Mosel Vitelic is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,260 in Mosel Vitelic on September 1, 2024 and sell it today you would earn a total of 190.00 from holding Mosel Vitelic or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compal Electronics vs. Mosel Vitelic
Performance |
| Timeline |
| Compal Electronics |
| Mosel Vitelic |
Compal Electronics and Mosel Vitelic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Electronics and Mosel Vitelic
The main advantage of trading using opposite Compal Electronics and Mosel Vitelic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics position performs unexpectedly, Mosel Vitelic 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 Mosel Vitelic will offset losses from the drop in Mosel Vitelic's long position.| Compal Electronics vs. Quanta Computer | Compal Electronics vs. Inventec Corp | Compal Electronics vs. Asustek Computer | Compal Electronics vs. Acer Inc |
| Mosel Vitelic vs. Winbond Electronics Corp | Mosel Vitelic vs. Macronix International Co | Mosel Vitelic vs. United Microelectronics | Mosel Vitelic vs. VIA Technologies |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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