Correlation Between Elitegroup Computer and Orient Semiconductor
Can any of the company-specific risk be diversified away by investing in both Elitegroup Computer and Orient Semiconductor 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 Orient Semiconductor 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 Orient Semiconductor Electronics, you can compare the effects of market volatilities on Elitegroup Computer and Orient Semiconductor 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 Orient Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elitegroup Computer and Orient Semiconductor.
Diversification Opportunities for Elitegroup Computer and Orient Semiconductor
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elitegroup and Orient is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Elitegroup Computer Systems and Orient Semiconductor Electroni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Semiconductor 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 Orient Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Semiconductor has no effect on the direction of Elitegroup Computer i.e., Elitegroup Computer and Orient Semiconductor go up and down completely randomly.
Pair Corralation between Elitegroup Computer and Orient Semiconductor
Assuming the 90 days trading horizon Elitegroup Computer Systems is expected to generate 0.65 times more return on investment than Orient Semiconductor. However, Elitegroup Computer Systems is 1.53 times less risky than Orient Semiconductor. It trades about -0.05 of its potential returns per unit of risk. Orient Semiconductor Electronics is currently generating about -0.03 per unit of risk. If you would invest 2,440 in Elitegroup Computer Systems on September 12, 2024 and sell it today you would lose (145.00) from holding Elitegroup Computer Systems or give up 5.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elitegroup Computer Systems vs. Orient Semiconductor Electroni
Performance |
| Timeline |
| Elitegroup Computer |
| Orient Semiconductor |
Elitegroup Computer and Orient Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elitegroup Computer and Orient Semiconductor
The main advantage of trading using opposite Elitegroup Computer and Orient Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elitegroup Computer position performs unexpectedly, Orient Semiconductor 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 Orient Semiconductor will offset losses from the drop in Orient Semiconductor's long position.| Elitegroup Computer vs. Micro Star International Co | Elitegroup Computer vs. Gigabyte Technology Co | Elitegroup Computer vs. Compal Electronics | Elitegroup Computer vs. VIA Technologies |
| Orient Semiconductor vs. AU Optronics | Orient Semiconductor vs. Innolux Corp | Orient Semiconductor vs. Ruentex Development Co | Orient Semiconductor vs. WiseChip Semiconductor |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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