Correlation Between Elitegroup Computer and Quanta Computer
Can any of the company-specific risk be diversified away by investing in both Elitegroup Computer and Quanta Computer 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 Quanta Computer 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 Quanta Computer, you can compare the effects of market volatilities on Elitegroup Computer and Quanta Computer 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 Quanta Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elitegroup Computer and Quanta Computer.
Diversification Opportunities for Elitegroup Computer and Quanta Computer
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elitegroup and Quanta is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Elitegroup Computer Systems and Quanta Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanta Computer 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 Quanta Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanta Computer has no effect on the direction of Elitegroup Computer i.e., Elitegroup Computer and Quanta Computer go up and down completely randomly.
Pair Corralation between Elitegroup Computer and Quanta Computer
Assuming the 90 days trading horizon Elitegroup Computer Systems is expected to under-perform the Quanta Computer. But the stock apears to be less risky and, when comparing its historical volatility, Elitegroup Computer Systems is 1.13 times less risky than Quanta Computer. The stock trades about -0.09 of its potential returns per unit of risk. The Quanta Computer is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 28,950 in Quanta Computer on October 25, 2024 and sell it today you would lose (2,000) from holding Quanta Computer or give up 6.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elitegroup Computer Systems vs. Quanta Computer
Performance |
| Timeline |
| Elitegroup Computer |
| Quanta Computer |
Elitegroup Computer and Quanta Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elitegroup Computer and Quanta Computer
The main advantage of trading using opposite Elitegroup Computer and Quanta Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elitegroup Computer position performs unexpectedly, Quanta Computer 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 Quanta Computer will offset losses from the drop in Quanta Computer'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 |
| Quanta Computer vs. Compal Electronics | Quanta Computer vs. Asustek Computer | Quanta Computer vs. Delta Electronics | Quanta Computer vs. Inventec Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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