Correlation Between Quanta Computer and Gigabyte Technology
Can any of the company-specific risk be diversified away by investing in both Quanta Computer and Gigabyte 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 Quanta Computer and Gigabyte Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanta Computer and Gigabyte Technology Co, you can compare the effects of market volatilities on Quanta Computer and Gigabyte 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 Quanta Computer with a short position of Gigabyte Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanta Computer and Gigabyte Technology.
Diversification Opportunities for Quanta Computer and Gigabyte Technology
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Quanta and Gigabyte is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Quanta Computer and Gigabyte Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigabyte Technology and Quanta 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 Quanta Computer are associated (or correlated) with Gigabyte Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigabyte Technology has no effect on the direction of Quanta Computer i.e., Quanta Computer and Gigabyte Technology go up and down completely randomly.
Pair Corralation between Quanta Computer and Gigabyte Technology
Assuming the 90 days trading horizon Quanta Computer is expected to under-perform the Gigabyte Technology. But the stock apears to be less risky and, when comparing its historical volatility, Quanta Computer is 1.21 times less risky than Gigabyte Technology. The stock trades about -0.11 of its potential returns per unit of risk. The Gigabyte Technology Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 27,100 in Gigabyte Technology Co on October 26, 2024 and sell it today you would lose (1,750) from holding Gigabyte Technology Co or give up 6.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quanta Computer vs. Gigabyte Technology Co
Performance |
| Timeline |
| Quanta Computer |
| Gigabyte Technology |
Quanta Computer and Gigabyte Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanta Computer and Gigabyte Technology
The main advantage of trading using opposite Quanta Computer and Gigabyte Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanta Computer position performs unexpectedly, Gigabyte 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 Gigabyte Technology will offset losses from the drop in Gigabyte Technology's long position.| Quanta Computer vs. Compal Electronics | Quanta Computer vs. Asustek Computer | Quanta Computer vs. Delta Electronics | Quanta Computer vs. Inventec Corp |
| Gigabyte Technology vs. Micro Star International Co | Gigabyte Technology vs. Asustek Computer | Gigabyte Technology vs. Quanta Computer | Gigabyte Technology vs. Compal Electronics |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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