Correlation Between Clevo and Greatek Electronics
Can any of the company-specific risk be diversified away by investing in both Clevo and Greatek Electronics 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 Clevo and Greatek Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clevo Co and Greatek Electronics, you can compare the effects of market volatilities on Clevo and Greatek Electronics 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 Clevo with a short position of Greatek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clevo and Greatek Electronics.
Diversification Opportunities for Clevo and Greatek Electronics
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clevo and Greatek is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Clevo Co and Greatek Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatek Electronics and Clevo 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 Clevo Co are associated (or correlated) with Greatek Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatek Electronics has no effect on the direction of Clevo i.e., Clevo and Greatek Electronics go up and down completely randomly.
Pair Corralation between Clevo and Greatek Electronics
Assuming the 90 days trading horizon Clevo Co is expected to under-perform the Greatek Electronics. In addition to that, Clevo is 1.37 times more volatile than Greatek Electronics. It trades about -0.06 of its total potential returns per unit of risk. Greatek Electronics is currently generating about 0.36 per unit of volatility. If you would invest 5,640 in Greatek Electronics on October 23, 2024 and sell it today you would earn a total of 500.00 from holding Greatek Electronics or generate 8.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Clevo Co vs. Greatek Electronics
Performance |
| Timeline |
| Clevo |
| Greatek Electronics |
Clevo and Greatek Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clevo and Greatek Electronics
The main advantage of trading using opposite Clevo and Greatek Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clevo position performs unexpectedly, Greatek Electronics 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 Greatek Electronics will offset losses from the drop in Greatek Electronics' long position.| Clevo vs. Inventec Corp | Clevo vs. Compal Electronics | Clevo vs. Cheng Uei Precision | Clevo vs. Pan International Industrial Corp |
| Greatek Electronics vs. Clevo Co | Greatek Electronics vs. Gigastorage Corp | Greatek Electronics vs. KYE Systems Corp | Greatek Electronics vs. AVerMedia Technologies |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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