Correlation Between Gemtek Technology and Compal Broadband
Can any of the company-specific risk be diversified away by investing in both Gemtek Technology and Compal Broadband 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 Gemtek Technology and Compal Broadband into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gemtek Technology Co and Compal Broadband Networks, you can compare the effects of market volatilities on Gemtek Technology and Compal Broadband 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 Gemtek Technology with a short position of Compal Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemtek Technology and Compal Broadband.
Diversification Opportunities for Gemtek Technology and Compal Broadband
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gemtek and Compal is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Gemtek Technology Co and Compal Broadband Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compal Broadband Networks and Gemtek Technology 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 Gemtek Technology Co are associated (or correlated) with Compal Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compal Broadband Networks has no effect on the direction of Gemtek Technology i.e., Gemtek Technology and Compal Broadband go up and down completely randomly.
Pair Corralation between Gemtek Technology and Compal Broadband
Assuming the 90 days trading horizon Gemtek Technology Co is expected to generate 1.11 times more return on investment than Compal Broadband. However, Gemtek Technology is 1.11 times more volatile than Compal Broadband Networks. It trades about 0.03 of its potential returns per unit of risk. Compal Broadband Networks is currently generating about 0.03 per unit of risk. If you would invest 2,860 in Gemtek Technology Co on August 30, 2024 and sell it today you would earn a total of 720.00 from holding Gemtek Technology Co or generate 25.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gemtek Technology Co vs. Compal Broadband Networks
Performance |
| Timeline |
| Gemtek Technology |
| Compal Broadband Networks |
Gemtek Technology and Compal Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gemtek Technology and Compal Broadband
The main advantage of trading using opposite Gemtek Technology and Compal Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gemtek Technology position performs unexpectedly, Compal Broadband 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 Compal Broadband will offset losses from the drop in Compal Broadband's long position.| Gemtek Technology vs. D Link Corp | Gemtek Technology vs. Sunplus Technology Co | Gemtek Technology vs. Silitech Technology Corp | Gemtek Technology vs. Zinwell |
| Compal Broadband vs. Accton Technology Corp | Compal Broadband vs. Wistron NeWeb Corp | Compal Broadband vs. Arcadyan Technology Corp | Compal Broadband vs. Sercomm 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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