Correlation Between Inventec Corp and Good Finance
Can any of the company-specific risk be diversified away by investing in both Inventec Corp and Good Finance 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 Inventec Corp and Good Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inventec Corp and Good Finance Securities, you can compare the effects of market volatilities on Inventec Corp and Good Finance 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 Inventec Corp with a short position of Good Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inventec Corp and Good Finance.
Diversification Opportunities for Inventec Corp and Good Finance
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Inventec and Good is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Inventec Corp and Good Finance Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Good Finance Securities and Inventec Corp 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 Inventec Corp are associated (or correlated) with Good Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Good Finance Securities has no effect on the direction of Inventec Corp i.e., Inventec Corp and Good Finance go up and down completely randomly.
Pair Corralation between Inventec Corp and Good Finance
Assuming the 90 days trading horizon Inventec Corp is expected to under-perform the Good Finance. In addition to that, Inventec Corp is 1.65 times more volatile than Good Finance Securities. It trades about -0.07 of its total potential returns per unit of risk. Good Finance Securities is currently generating about 0.08 per unit of volatility. If you would invest 2,370 in Good Finance Securities on October 29, 2024 and sell it today you would earn a total of 30.00 from holding Good Finance Securities or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inventec Corp vs. Good Finance Securities
Performance |
| Timeline |
| Inventec Corp |
| Good Finance Securities |
Inventec Corp and Good Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inventec Corp and Good Finance
The main advantage of trading using opposite Inventec Corp and Good Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inventec Corp position performs unexpectedly, Good Finance 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 Good Finance will offset losses from the drop in Good Finance's long position.| Inventec Corp vs. Compal Electronics | Inventec Corp vs. Quanta Computer | Inventec Corp vs. Wistron Corp | Inventec Corp vs. Lite On Technology Corp |
| Good Finance vs. Hsinli Chemical Industrial | Good Finance vs. Prime Oil Chemical | Good Finance vs. China Petrochemical Development | Good Finance vs. Tong Hwa Synthetic Fiber |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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