Correlation Between Fortune Information and Quanta Storage
Can any of the company-specific risk be diversified away by investing in both Fortune Information and Quanta Storage 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 Fortune Information and Quanta Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortune Information Systems and Quanta Storage, you can compare the effects of market volatilities on Fortune Information and Quanta Storage 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 Fortune Information with a short position of Quanta Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortune Information and Quanta Storage.
Diversification Opportunities for Fortune Information and Quanta Storage
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fortune and Quanta is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Information Systems and Quanta Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanta Storage and Fortune 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 Fortune Information Systems are associated (or correlated) with Quanta Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanta Storage has no effect on the direction of Fortune Information i.e., Fortune Information and Quanta Storage go up and down completely randomly.
Pair Corralation between Fortune Information and Quanta Storage
Assuming the 90 days trading horizon Fortune Information Systems is expected to under-perform the Quanta Storage. But the stock apears to be less risky and, when comparing its historical volatility, Fortune Information Systems is 1.62 times less risky than Quanta Storage. The stock trades about -0.38 of its potential returns per unit of risk. The Quanta Storage is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 9,670 in Quanta Storage on August 31, 2024 and sell it today you would lose (380.00) from holding Quanta Storage or give up 3.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortune Information Systems vs. Quanta Storage
Performance |
| Timeline |
| Fortune Information |
| Quanta Storage |
Fortune Information and Quanta Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortune Information and Quanta Storage
The main advantage of trading using opposite Fortune Information and Quanta Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortune Information position performs unexpectedly, Quanta Storage 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 Quanta Storage will offset losses from the drop in Quanta Storage's long position.| Fortune Information vs. United Microelectronics | Fortune Information vs. Winbond Electronics Corp | Fortune Information vs. Macronix International Co |
| Quanta Storage vs. Qisda Corp | Quanta Storage vs. Quanta Computer | Quanta Storage vs. Coretronic | Quanta Storage vs. Wistron 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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