Correlation Between Quanta Computer and Advantech
Can any of the company-specific risk be diversified away by investing in both Quanta Computer and Advantech 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 Advantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanta Computer and Advantech Co, you can compare the effects of market volatilities on Quanta Computer and Advantech 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 Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanta Computer and Advantech.
Diversification Opportunities for Quanta Computer and Advantech
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Quanta and Advantech is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Quanta Computer and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech 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 Advantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantech has no effect on the direction of Quanta Computer i.e., Quanta Computer and Advantech go up and down completely randomly.
Pair Corralation between Quanta Computer and Advantech
Assuming the 90 days trading horizon Quanta Computer is expected to under-perform the Advantech. But the stock apears to be less risky and, when comparing its historical volatility, Quanta Computer is 1.27 times less risky than Advantech. The stock trades about -0.24 of its potential returns per unit of risk. The Advantech Co is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 34,500 in Advantech Co on November 4, 2024 and sell it today you would earn a total of 3,400 from holding Advantech Co or generate 9.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quanta Computer vs. Advantech Co
Performance |
| Timeline |
| Quanta Computer |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Advantech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Quanta Computer and Advantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanta Computer and Advantech
The main advantage of trading using opposite Quanta Computer and Advantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanta Computer position performs unexpectedly, Advantech 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 Advantech will offset losses from the drop in Advantech's long position.The idea behind Quanta Computer and Advantech Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |