Correlation Between Chinese Gamer and Quanta Storage
Can any of the company-specific risk be diversified away by investing in both Chinese Gamer 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 Chinese Gamer and Quanta Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chinese Gamer International and Quanta Storage, you can compare the effects of market volatilities on Chinese Gamer 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 Chinese Gamer with a short position of Quanta Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Gamer and Quanta Storage.
Diversification Opportunities for Chinese Gamer and Quanta Storage
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chinese and Quanta is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Gamer International and Quanta Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanta Storage and Chinese Gamer 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 Chinese Gamer International 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 Chinese Gamer i.e., Chinese Gamer and Quanta Storage go up and down completely randomly.
Pair Corralation between Chinese Gamer and Quanta Storage
Assuming the 90 days trading horizon Chinese Gamer International is expected to under-perform the Quanta Storage. But the stock apears to be less risky and, when comparing its historical volatility, Chinese Gamer International is 1.45 times less risky than Quanta Storage. The stock trades about -0.01 of its potential returns per unit of risk. The Quanta Storage is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,870 in Quanta Storage on September 2, 2024 and sell it today you would earn a total of 1,670 from holding Quanta Storage or generate 21.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chinese Gamer International vs. Quanta Storage
Performance |
| Timeline |
| Chinese Gamer Intern |
| Quanta Storage |
Chinese Gamer and Quanta Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Gamer and Quanta Storage
The main advantage of trading using opposite Chinese Gamer and Quanta Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Gamer 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.| Chinese Gamer vs. Genovate Biotechnology Co | Chinese Gamer vs. Universal Vision Biotechnology | Chinese Gamer vs. RiTdisplay Corp | Chinese Gamer vs. Elitegroup Computer Systems |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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