Correlation Between Elitegroup Computer and Leadtek Research
Can any of the company-specific risk be diversified away by investing in both Elitegroup Computer and Leadtek Research 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 Leadtek Research 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 Leadtek Research, you can compare the effects of market volatilities on Elitegroup Computer and Leadtek Research 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 Leadtek Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elitegroup Computer and Leadtek Research.
Diversification Opportunities for Elitegroup Computer and Leadtek Research
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elitegroup and Leadtek is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Elitegroup Computer Systems and Leadtek Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leadtek Research 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 Leadtek Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leadtek Research has no effect on the direction of Elitegroup Computer i.e., Elitegroup Computer and Leadtek Research go up and down completely randomly.
Pair Corralation between Elitegroup Computer and Leadtek Research
Assuming the 90 days trading horizon Elitegroup Computer Systems is expected to generate 0.91 times more return on investment than Leadtek Research. However, Elitegroup Computer Systems is 1.1 times less risky than Leadtek Research. It trades about 0.0 of its potential returns per unit of risk. Leadtek Research is currently generating about -0.08 per unit of risk. If you would invest 2,220 in Elitegroup Computer Systems on October 26, 2024 and sell it today you would lose (10.00) from holding Elitegroup Computer Systems or give up 0.45% 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. Leadtek Research
Performance |
| Timeline |
| Elitegroup Computer |
| Leadtek Research |
Elitegroup Computer and Leadtek Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elitegroup Computer and Leadtek Research
The main advantage of trading using opposite Elitegroup Computer and Leadtek Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elitegroup Computer position performs unexpectedly, Leadtek Research 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 Leadtek Research will offset losses from the drop in Leadtek Research'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 |
| Leadtek Research vs. Elitegroup Computer Systems | Leadtek Research vs. Gigabyte Technology Co | Leadtek Research vs. Micro Star International Co | Leadtek Research vs. Biostar Microtech 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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