Correlation Between Compal Electronics and Chicony Electronics
Can any of the company-specific risk be diversified away by investing in both Compal Electronics and Chicony Electronics 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 Chicony Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compal Electronics and Chicony Electronics Co, you can compare the effects of market volatilities on Compal Electronics and Chicony Electronics 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 Chicony Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and Chicony Electronics.
Diversification Opportunities for Compal Electronics and Chicony Electronics
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compal and Chicony is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics and Chicony Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicony Electronics 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 Chicony Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicony Electronics has no effect on the direction of Compal Electronics i.e., Compal Electronics and Chicony Electronics go up and down completely randomly.
Pair Corralation between Compal Electronics and Chicony Electronics
Assuming the 90 days trading horizon Compal Electronics is expected to generate 0.83 times more return on investment than Chicony Electronics. However, Compal Electronics is 1.2 times less risky than Chicony Electronics. It trades about 0.17 of its potential returns per unit of risk. Chicony Electronics Co is currently generating about -0.04 per unit of risk. If you would invest 3,630 in Compal Electronics on August 28, 2024 and sell it today you would earn a total of 210.00 from holding Compal Electronics or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compal Electronics vs. Chicony Electronics Co
Performance |
| Timeline |
| Compal Electronics |
| Chicony Electronics |
Compal Electronics and Chicony Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Electronics and Chicony Electronics
The main advantage of trading using opposite Compal Electronics and Chicony Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics position performs unexpectedly, Chicony Electronics 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 Chicony Electronics will offset losses from the drop in Chicony Electronics' long position.| Compal Electronics vs. Quanta Computer | Compal Electronics vs. Inventec Corp | Compal Electronics vs. Asustek Computer | Compal Electronics vs. Acer Inc |
| Chicony Electronics vs. Lite On Technology Corp | Chicony Electronics vs. Inventec Corp | Chicony Electronics vs. Compal Electronics | Chicony Electronics vs. Synnex Technology International |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |