Correlation Between Quanta Computer and Global Unichip
Can any of the company-specific risk be diversified away by investing in both Quanta Computer and Global Unichip 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 Global Unichip into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanta Computer and Global Unichip Corp, you can compare the effects of market volatilities on Quanta Computer and Global Unichip 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 Global Unichip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanta Computer and Global Unichip.
Diversification Opportunities for Quanta Computer and Global Unichip
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Quanta and Global is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Quanta Computer and Global Unichip Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Unichip Corp 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 Global Unichip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Unichip Corp has no effect on the direction of Quanta Computer i.e., Quanta Computer and Global Unichip go up and down completely randomly.
Pair Corralation between Quanta Computer and Global Unichip
Assuming the 90 days trading horizon Quanta Computer is expected to under-perform the Global Unichip. But the stock apears to be less risky and, when comparing its historical volatility, Quanta Computer is 1.45 times less risky than Global Unichip. The stock trades about -0.11 of its potential returns per unit of risk. The Global Unichip Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 123,500 in Global Unichip Corp on August 30, 2024 and sell it today you would lose (5,500) from holding Global Unichip Corp or give up 4.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Quanta Computer vs. Global Unichip Corp
Performance |
| Timeline |
| Quanta Computer |
| Global Unichip Corp |
Quanta Computer and Global Unichip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanta Computer and Global Unichip
The main advantage of trading using opposite Quanta Computer and Global Unichip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanta Computer position performs unexpectedly, Global Unichip 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 Global Unichip will offset losses from the drop in Global Unichip's long position.| Quanta Computer vs. Compal Electronics | Quanta Computer vs. Asustek Computer | Quanta Computer vs. Delta Electronics | Quanta Computer vs. Inventec Corp |
| Global Unichip vs. Alchip Technologies | Global Unichip vs. Realtek Semiconductor Corp | Global Unichip vs. Faraday Technology Corp | Global Unichip vs. Novatek Microelectronics Corp |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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