Correlation Between Quanta Computer and Infortrend Technology
Can any of the company-specific risk be diversified away by investing in both Quanta Computer and Infortrend 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 Infortrend 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 Infortrend Technology, you can compare the effects of market volatilities on Quanta Computer and Infortrend 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 Infortrend Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanta Computer and Infortrend Technology.
Diversification Opportunities for Quanta Computer and Infortrend Technology
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Quanta and Infortrend is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Quanta Computer and Infortrend Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infortrend 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 Infortrend Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infortrend Technology has no effect on the direction of Quanta Computer i.e., Quanta Computer and Infortrend Technology go up and down completely randomly.
Pair Corralation between Quanta Computer and Infortrend Technology
Assuming the 90 days trading horizon Quanta Computer is expected to generate 1.05 times more return on investment than Infortrend Technology. However, Quanta Computer is 1.05 times more volatile than Infortrend Technology. It trades about 0.11 of its potential returns per unit of risk. Infortrend Technology is currently generating about 0.07 per unit of risk. If you would invest 7,640 in Quanta Computer on August 27, 2024 and sell it today you would earn a total of 22,060 from holding Quanta Computer or generate 288.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Quanta Computer vs. Infortrend Technology
Performance |
| Timeline |
| Quanta Computer |
| Infortrend Technology |
Quanta Computer and Infortrend Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanta Computer and Infortrend Technology
The main advantage of trading using opposite Quanta Computer and Infortrend Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanta Computer position performs unexpectedly, Infortrend 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 Infortrend Technology will offset losses from the drop in Infortrend Technology's long position.The idea behind Quanta Computer and Infortrend Technology 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.| Infortrend Technology vs. Novatek Microelectronics Corp | Infortrend Technology vs. Quanta Computer | Infortrend Technology vs. United Microelectronics |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |