Correlation Between Quanta Computer and Chain Chon
Can any of the company-specific risk be diversified away by investing in both Quanta Computer and Chain Chon 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 Chain Chon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanta Computer and Chain Chon Industrial, you can compare the effects of market volatilities on Quanta Computer and Chain Chon 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 Chain Chon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanta Computer and Chain Chon.
Diversification Opportunities for Quanta Computer and Chain Chon
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Quanta and Chain is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Quanta Computer and Chain Chon Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chain Chon Industrial 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 Chain Chon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chain Chon Industrial has no effect on the direction of Quanta Computer i.e., Quanta Computer and Chain Chon go up and down completely randomly.
Pair Corralation between Quanta Computer and Chain Chon
Assuming the 90 days trading horizon Quanta Computer is expected to generate 0.75 times more return on investment than Chain Chon. However, Quanta Computer is 1.33 times less risky than Chain Chon. It trades about -0.09 of its potential returns per unit of risk. Chain Chon Industrial is currently generating about -0.32 per unit of risk. If you would invest 30,500 in Quanta Computer on September 2, 2024 and sell it today you would lose (1,400) from holding Quanta Computer or give up 4.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quanta Computer vs. Chain Chon Industrial
Performance |
| Timeline |
| Quanta Computer |
| Chain Chon Industrial |
Quanta Computer and Chain Chon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanta Computer and Chain Chon
The main advantage of trading using opposite Quanta Computer and Chain Chon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanta Computer position performs unexpectedly, Chain Chon 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 Chain Chon will offset losses from the drop in Chain Chon's long position.| Quanta Computer vs. Compal Electronics | Quanta Computer vs. Asustek Computer | Quanta Computer vs. Delta Electronics | Quanta Computer vs. Inventec Corp |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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