Correlation Between Pan Jit and Compeq Manufacturing
Can any of the company-specific risk be diversified away by investing in both Pan Jit and Compeq Manufacturing 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 Pan Jit and Compeq Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan Jit International and Compeq Manufacturing Co, you can compare the effects of market volatilities on Pan Jit and Compeq Manufacturing 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 Pan Jit with a short position of Compeq Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Jit and Compeq Manufacturing.
Diversification Opportunities for Pan Jit and Compeq Manufacturing
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pan and Compeq is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Pan Jit International and Compeq Manufacturing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compeq Manufacturing and Pan Jit 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 Pan Jit International are associated (or correlated) with Compeq Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compeq Manufacturing has no effect on the direction of Pan Jit i.e., Pan Jit and Compeq Manufacturing go up and down completely randomly.
Pair Corralation between Pan Jit and Compeq Manufacturing
Assuming the 90 days trading horizon Pan Jit International is expected to under-perform the Compeq Manufacturing. But the stock apears to be less risky and, when comparing its historical volatility, Pan Jit International is 1.15 times less risky than Compeq Manufacturing. The stock trades about -0.16 of its potential returns per unit of risk. The Compeq Manufacturing Co is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 6,840 in Compeq Manufacturing Co on September 3, 2024 and sell it today you would lose (750.00) from holding Compeq Manufacturing Co or give up 10.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan Jit International vs. Compeq Manufacturing Co
Performance |
| Timeline |
| Pan Jit International |
| Compeq Manufacturing |
Pan Jit and Compeq Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Jit and Compeq Manufacturing
The main advantage of trading using opposite Pan Jit and Compeq Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Jit position performs unexpectedly, Compeq Manufacturing 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 Compeq Manufacturing will offset losses from the drop in Compeq Manufacturing's long position.| Pan Jit vs. Taiwan Semiconductor Manufacturing | Pan Jit vs. Yang Ming Marine | Pan Jit vs. ASE Industrial Holding | Pan Jit vs. AU Optronics |
| Compeq Manufacturing vs. Taiwan Semiconductor Manufacturing | Compeq Manufacturing vs. Yang Ming Marine | Compeq Manufacturing vs. ASE Industrial Holding | Compeq Manufacturing vs. AU Optronics |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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