Correlation Between Elitegroup Computer and First Copper
Can any of the company-specific risk be diversified away by investing in both Elitegroup Computer and First Copper 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 Elitegroup Computer and First Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elitegroup Computer Systems and First Copper Technology, you can compare the effects of market volatilities on Elitegroup Computer and First Copper 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 Elitegroup Computer with a short position of First Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elitegroup Computer and First Copper.
Diversification Opportunities for Elitegroup Computer and First Copper
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Elitegroup and First is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Elitegroup Computer Systems and First Copper Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Copper Technology and Elitegroup Computer 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 Elitegroup Computer Systems are associated (or correlated) with First Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Copper Technology has no effect on the direction of Elitegroup Computer i.e., Elitegroup Computer and First Copper go up and down completely randomly.
Pair Corralation between Elitegroup Computer and First Copper
Assuming the 90 days trading horizon Elitegroup Computer Systems is expected to under-perform the First Copper. In addition to that, Elitegroup Computer is 1.11 times more volatile than First Copper Technology. It trades about -0.09 of its total potential returns per unit of risk. First Copper Technology is currently generating about -0.1 per unit of volatility. If you would invest 5,430 in First Copper Technology on October 25, 2024 and sell it today you would lose (1,700) from holding First Copper Technology or give up 31.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elitegroup Computer Systems vs. First Copper Technology
Performance |
| Timeline |
| Elitegroup Computer |
| First Copper Technology |
Elitegroup Computer and First Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elitegroup Computer and First Copper
The main advantage of trading using opposite Elitegroup Computer and First Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elitegroup Computer position performs unexpectedly, First Copper 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 First Copper will offset losses from the drop in First Copper's long position.| Elitegroup Computer vs. Unimicron Technology Corp | Elitegroup Computer vs. Kinsus Interconnect Technology | Elitegroup Computer vs. Novatek Microelectronics Corp | Elitegroup Computer vs. Delta Electronics |
| First Copper vs. Chung Hung Steel | First Copper vs. Ta Chen Stainless | First Copper vs. Tung Ho Steel | First Copper vs. Yieh Phui Enterprise |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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