Correlation Between Transcend Information and Cameo Communications
Can any of the company-specific risk be diversified away by investing in both Transcend Information and Cameo Communications 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 Transcend Information and Cameo Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transcend Information and Cameo Communications, you can compare the effects of market volatilities on Transcend Information and Cameo Communications 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 Transcend Information with a short position of Cameo Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcend Information and Cameo Communications.
Diversification Opportunities for Transcend Information and Cameo Communications
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Transcend and Cameo is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Transcend Information and Cameo Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cameo Communications and Transcend Information 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 Transcend Information are associated (or correlated) with Cameo Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cameo Communications has no effect on the direction of Transcend Information i.e., Transcend Information and Cameo Communications go up and down completely randomly.
Pair Corralation between Transcend Information and Cameo Communications
Assuming the 90 days trading horizon Transcend Information is expected to generate 0.74 times more return on investment than Cameo Communications. However, Transcend Information is 1.35 times less risky than Cameo Communications. It trades about 0.05 of its potential returns per unit of risk. Cameo Communications is currently generating about -0.01 per unit of risk. If you would invest 7,310 in Transcend Information on August 28, 2024 and sell it today you would earn a total of 2,050 from holding Transcend Information or generate 28.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transcend Information vs. Cameo Communications
Performance |
| Timeline |
| Transcend Information |
| Cameo Communications |
Transcend Information and Cameo Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transcend Information and Cameo Communications
The main advantage of trading using opposite Transcend Information and Cameo Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transcend Information position performs unexpectedly, Cameo Communications 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 Cameo Communications will offset losses from the drop in Cameo Communications' long position.| Transcend Information vs. Nanya Technology Corp | Transcend Information vs. Powertech Technology | Transcend Information vs. Chicony Electronics Co | Transcend Information vs. Realtek Semiconductor Corp |
| Cameo Communications vs. Gemtek Technology Co | Cameo Communications vs. CyberTAN Technology | Cameo Communications vs. Alpha Networks | Cameo Communications vs. D Link 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |