Correlation Between Clevo and New Palace
Can any of the company-specific risk be diversified away by investing in both Clevo and New Palace 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 New Palace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clevo Co and New Palace International, you can compare the effects of market volatilities on Clevo and New Palace 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 New Palace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clevo and New Palace.
Diversification Opportunities for Clevo and New Palace
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Clevo and New is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Clevo Co and New Palace International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Palace International 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 New Palace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Palace International has no effect on the direction of Clevo i.e., Clevo and New Palace go up and down completely randomly.
Pair Corralation between Clevo and New Palace
Assuming the 90 days trading horizon Clevo Co is expected to generate 1.74 times more return on investment than New Palace. However, Clevo is 1.74 times more volatile than New Palace International. It trades about 0.08 of its potential returns per unit of risk. New Palace International is currently generating about -0.04 per unit of risk. If you would invest 3,380 in Clevo Co on September 3, 2024 and sell it today you would earn a total of 2,200 from holding Clevo Co or generate 65.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clevo Co vs. New Palace International
Performance |
| Timeline |
| Clevo |
| New Palace International |
Clevo and New Palace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clevo and New Palace
The main advantage of trading using opposite Clevo and New Palace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clevo position performs unexpectedly, New Palace 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 New Palace will offset losses from the drop in New Palace's long position.| Clevo vs. Inventec Corp | Clevo vs. Compal Electronics | Clevo vs. Cheng Uei Precision | Clevo vs. Pan International Industrial Corp |
| New Palace vs. Shui Mu International Co | New Palace vs. First Hotel Co | New Palace vs. Jinli Group Holdings | New Palace vs. Super Dragon Technology |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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