Correlation Between Elitegroup Computer and Scan D
Can any of the company-specific risk be diversified away by investing in both Elitegroup Computer and Scan D 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 Scan D 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 Scan D, you can compare the effects of market volatilities on Elitegroup Computer and Scan D 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 Scan D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elitegroup Computer and Scan D.
Diversification Opportunities for Elitegroup Computer and Scan D
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Elitegroup and Scan is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Elitegroup Computer Systems and Scan D in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scan D 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 Scan D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scan D has no effect on the direction of Elitegroup Computer i.e., Elitegroup Computer and Scan D go up and down completely randomly.
Pair Corralation between Elitegroup Computer and Scan D
Assuming the 90 days trading horizon Elitegroup Computer Systems is expected to generate 1.94 times more return on investment than Scan D. However, Elitegroup Computer is 1.94 times more volatile than Scan D. It trades about -0.06 of its potential returns per unit of risk. Scan D is currently generating about -0.16 per unit of risk. If you would invest 2,260 in Elitegroup Computer Systems on October 29, 2024 and sell it today you would lose (50.00) from holding Elitegroup Computer Systems or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elitegroup Computer Systems vs. Scan D
Performance |
| Timeline |
| Elitegroup Computer |
| Scan D |
Elitegroup Computer and Scan D Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elitegroup Computer and Scan D
The main advantage of trading using opposite Elitegroup Computer and Scan D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elitegroup Computer position performs unexpectedly, Scan D 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 Scan D will offset losses from the drop in Scan D'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 |
| Scan D vs. LandMark Optoelectronics | Scan D vs. Asia Metal Industries | Scan D vs. Ligitek Electronics Co | Scan D vs. Sunspring Metal 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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