Correlation Between IEI Integration and Quanta Storage
Can any of the company-specific risk be diversified away by investing in both IEI Integration 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 IEI Integration and Quanta Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IEI Integration Corp and Quanta Storage, you can compare the effects of market volatilities on IEI Integration 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 IEI Integration with a short position of Quanta Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of IEI Integration and Quanta Storage.
Diversification Opportunities for IEI Integration and Quanta Storage
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IEI and Quanta is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding IEI Integration Corp and Quanta Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanta Storage and IEI Integration 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 IEI Integration Corp 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 IEI Integration i.e., IEI Integration and Quanta Storage go up and down completely randomly.
Pair Corralation between IEI Integration and Quanta Storage
Assuming the 90 days trading horizon IEI Integration Corp is expected to generate 1.06 times more return on investment than Quanta Storage. However, IEI Integration is 1.06 times more volatile than Quanta Storage. It trades about 0.24 of its potential returns per unit of risk. Quanta Storage is currently generating about -0.06 per unit of risk. If you would invest 7,810 in IEI Integration Corp on August 27, 2024 and sell it today you would earn a total of 790.00 from holding IEI Integration Corp or generate 10.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IEI Integration Corp vs. Quanta Storage
Performance |
| Timeline |
| IEI Integration Corp |
| Quanta Storage |
IEI Integration and Quanta Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IEI Integration and Quanta Storage
The main advantage of trading using opposite IEI Integration and Quanta Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IEI Integration 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.| IEI Integration vs. Advantech Co | IEI Integration vs. Getac Technology Corp | IEI Integration vs. Flytech Technology Co | IEI Integration vs. ADLINK Technology |
| Quanta Storage vs. Quanta Computer | Quanta Storage vs. Wiwynn Corp | Quanta Storage vs. Getac Technology Corp | Quanta Storage vs. IEI Integration 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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