Correlation Between Compal Electronics and Deltamac Taiwan
Can any of the company-specific risk be diversified away by investing in both Compal Electronics and Deltamac Taiwan 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 Deltamac Taiwan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compal Electronics and Deltamac Taiwan Co, you can compare the effects of market volatilities on Compal Electronics and Deltamac Taiwan 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 Deltamac Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and Deltamac Taiwan.
Diversification Opportunities for Compal Electronics and Deltamac Taiwan
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compal and Deltamac is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics and Deltamac Taiwan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deltamac Taiwan 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 Deltamac Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deltamac Taiwan has no effect on the direction of Compal Electronics i.e., Compal Electronics and Deltamac Taiwan go up and down completely randomly.
Pair Corralation between Compal Electronics and Deltamac Taiwan
Assuming the 90 days trading horizon Compal Electronics is expected to generate 0.18 times more return on investment than Deltamac Taiwan. However, Compal Electronics is 5.56 times less risky than Deltamac Taiwan. It trades about 0.16 of its potential returns per unit of risk. Deltamac Taiwan Co is currently generating about -0.02 per unit of risk. If you would invest 3,685 in Compal Electronics on September 13, 2024 and sell it today you would earn a total of 165.00 from holding Compal Electronics or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compal Electronics vs. Deltamac Taiwan Co
Performance |
| Timeline |
| Compal Electronics |
| Deltamac Taiwan |
Compal Electronics and Deltamac Taiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Electronics and Deltamac Taiwan
The main advantage of trading using opposite Compal Electronics and Deltamac Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics position performs unexpectedly, Deltamac Taiwan 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 Deltamac Taiwan will offset losses from the drop in Deltamac Taiwan's long position.| Compal Electronics vs. Quanta Computer | Compal Electronics vs. Inventec Corp | Compal Electronics vs. Asustek Computer | Compal Electronics vs. Acer Inc |
| Deltamac Taiwan vs. Pili International Multimedia | Deltamac Taiwan vs. YuantaP shares Taiwan Mid Cap | Deltamac Taiwan vs. Fubon MSCI Taiwan | Deltamac Taiwan vs. YuantaP shares Taiwan Electronics |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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