Correlation Between Quanta Computer and Chicony Electronics
Can any of the company-specific risk be diversified away by investing in both Quanta Computer and Chicony 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 Quanta Computer and Chicony Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanta Computer and Chicony Electronics Co, you can compare the effects of market volatilities on Quanta Computer and Chicony 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 Quanta Computer with a short position of Chicony Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanta Computer and Chicony Electronics.
Diversification Opportunities for Quanta Computer and Chicony Electronics
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Quanta and Chicony is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Quanta Computer and Chicony Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicony Electronics 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 Chicony Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicony Electronics has no effect on the direction of Quanta Computer i.e., Quanta Computer and Chicony Electronics go up and down completely randomly.
Pair Corralation between Quanta Computer and Chicony Electronics
Assuming the 90 days trading horizon Quanta Computer is expected to generate 1.56 times more return on investment than Chicony Electronics. However, Quanta Computer is 1.56 times more volatile than Chicony Electronics Co. It trades about 0.12 of its potential returns per unit of risk. Chicony Electronics Co is currently generating about 0.07 per unit of risk. If you would invest 7,180 in Quanta Computer on August 28, 2024 and sell it today you would earn a total of 22,720 from holding Quanta Computer or generate 316.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quanta Computer vs. Chicony Electronics Co
Performance |
| Timeline |
| Quanta Computer |
| Chicony Electronics |
Quanta Computer and Chicony Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanta Computer and Chicony Electronics
The main advantage of trading using opposite Quanta Computer and Chicony Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanta Computer position performs unexpectedly, Chicony 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 Chicony Electronics will offset losses from the drop in Chicony Electronics' long position.| Quanta Computer vs. Compal Electronics | Quanta Computer vs. Asustek Computer | Quanta Computer vs. Delta Electronics | Quanta Computer vs. Inventec Corp |
| Chicony Electronics vs. Lite On Technology Corp | Chicony Electronics vs. Inventec Corp | Chicony Electronics vs. Compal Electronics | Chicony Electronics vs. Synnex Technology International |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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