Correlation Between Data International and Greatek Electronics
Can any of the company-specific risk be diversified away by investing in both Data International and Greatek Electronics 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 Data International and Greatek Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Data International Co and Greatek Electronics, you can compare the effects of market volatilities on Data International and Greatek Electronics 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 Data International with a short position of Greatek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data International and Greatek Electronics.
Diversification Opportunities for Data International and Greatek Electronics
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Data and Greatek is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Data International Co and Greatek Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatek Electronics and Data International 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 Data International Co are associated (or correlated) with Greatek Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatek Electronics has no effect on the direction of Data International i.e., Data International and Greatek Electronics go up and down completely randomly.
Pair Corralation between Data International and Greatek Electronics
Assuming the 90 days trading horizon Data International Co is expected to under-perform the Greatek Electronics. In addition to that, Data International is 3.2 times more volatile than Greatek Electronics. It trades about -0.23 of its total potential returns per unit of risk. Greatek Electronics is currently generating about 0.08 per unit of volatility. If you would invest 5,870 in Greatek Electronics on October 26, 2024 and sell it today you would earn a total of 330.00 from holding Greatek Electronics or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Data International Co vs. Greatek Electronics
Performance |
| Timeline |
| Data International |
| Greatek Electronics |
Data International and Greatek Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Data International and Greatek Electronics
The main advantage of trading using opposite Data International and Greatek Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data International position performs unexpectedly, Greatek Electronics 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 Greatek Electronics will offset losses from the drop in Greatek Electronics' long position.| Data International vs. Trade Van Information Services | Data International vs. eCloudvalley Digital Technology | Data International vs. BRIM Biotechnology | Data International vs. Fubon Taiwan Technology |
| Greatek Electronics vs. King Yuan Electronics | Greatek Electronics vs. Powertech Technology | Greatek Electronics vs. Realtek Semiconductor Corp | Greatek Electronics vs. Elan Microelectronics 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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