Correlation Between Elitegroup Computer and Thermaltake Technology
Can any of the company-specific risk be diversified away by investing in both Elitegroup Computer and Thermaltake Technology 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 Thermaltake Technology 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 Thermaltake Technology Co, you can compare the effects of market volatilities on Elitegroup Computer and Thermaltake Technology 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 Thermaltake Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elitegroup Computer and Thermaltake Technology.
Diversification Opportunities for Elitegroup Computer and Thermaltake Technology
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elitegroup and Thermaltake is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Elitegroup Computer Systems and Thermaltake Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermaltake 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 Thermaltake Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermaltake Technology has no effect on the direction of Elitegroup Computer i.e., Elitegroup Computer and Thermaltake Technology go up and down completely randomly.
Pair Corralation between Elitegroup Computer and Thermaltake Technology
Assuming the 90 days trading horizon Elitegroup Computer Systems is expected to under-perform the Thermaltake Technology. In addition to that, Elitegroup Computer is 1.11 times more volatile than Thermaltake Technology Co. It trades about 0.0 of its total potential returns per unit of risk. Thermaltake Technology Co is currently generating about 0.0 per unit of volatility. If you would invest 3,695 in Thermaltake Technology Co on September 3, 2024 and sell it today you would lose (15.00) from holding Thermaltake Technology Co or give up 0.41% 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. Thermaltake Technology Co
Performance |
| Timeline |
| Elitegroup Computer |
| Thermaltake Technology |
Elitegroup Computer and Thermaltake Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elitegroup Computer and Thermaltake Technology
The main advantage of trading using opposite Elitegroup Computer and Thermaltake Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elitegroup Computer position performs unexpectedly, Thermaltake Technology 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 Thermaltake Technology will offset losses from the drop in Thermaltake Technology's long position.| Elitegroup Computer vs. Taiwan Semiconductor Manufacturing | Elitegroup Computer vs. Yang Ming Marine | Elitegroup Computer vs. ASE Industrial Holding | Elitegroup Computer vs. AU Optronics |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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