Correlation Between Quanta Computer and Hotai Finance
Can any of the company-specific risk be diversified away by investing in both Quanta Computer and Hotai Finance 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 Hotai Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanta Computer and Hotai Finance Corp, you can compare the effects of market volatilities on Quanta Computer and Hotai Finance 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 Hotai Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanta Computer and Hotai Finance.
Diversification Opportunities for Quanta Computer and Hotai Finance
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Quanta and Hotai is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Quanta Computer and Hotai Finance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotai Finance 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 Hotai Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotai Finance Corp has no effect on the direction of Quanta Computer i.e., Quanta Computer and Hotai Finance go up and down completely randomly.
Pair Corralation between Quanta Computer and Hotai Finance
Assuming the 90 days trading horizon Quanta Computer is expected to generate 0.32 times more return on investment than Hotai Finance. However, Quanta Computer is 3.16 times less risky than Hotai Finance. It trades about 0.09 of its potential returns per unit of risk. Hotai Finance Corp is currently generating about 0.03 per unit of risk. If you would invest 11,700 in Quanta Computer on August 27, 2024 and sell it today you would earn a total of 18,000 from holding Quanta Computer or generate 153.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quanta Computer vs. Hotai Finance Corp
Performance |
| Timeline |
| Quanta Computer |
| Hotai Finance Corp |
Quanta Computer and Hotai Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanta Computer and Hotai Finance
The main advantage of trading using opposite Quanta Computer and Hotai Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanta Computer position performs unexpectedly, Hotai Finance 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 Hotai Finance will offset losses from the drop in Hotai Finance's long position.The idea behind Quanta Computer and Hotai Finance Corp 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.| Hotai Finance vs. Chailease Holding Co | Hotai Finance vs. Yulon Finance Corp | Hotai Finance vs. Pou Chen Corp | Hotai Finance vs. Ruentex Industries |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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