Correlation Between Concord Securities and Inventec Corp
Can any of the company-specific risk be diversified away by investing in both Concord Securities and Inventec Corp 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 Concord Securities and Inventec Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concord Securities Co and Inventec Corp, you can compare the effects of market volatilities on Concord Securities and Inventec Corp 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 Concord Securities with a short position of Inventec Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Securities and Inventec Corp.
Diversification Opportunities for Concord Securities and Inventec Corp
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Concord and Inventec is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Concord Securities Co and Inventec Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventec Corp and Concord Securities 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 Concord Securities Co are associated (or correlated) with Inventec Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventec Corp has no effect on the direction of Concord Securities i.e., Concord Securities and Inventec Corp go up and down completely randomly.
Pair Corralation between Concord Securities and Inventec Corp
Assuming the 90 days trading horizon Concord Securities is expected to generate 1.16 times less return on investment than Inventec Corp. But when comparing it to its historical volatility, Concord Securities Co is 1.09 times less risky than Inventec Corp. It trades about 0.04 of its potential returns per unit of risk. Inventec Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,240 in Inventec Corp on August 26, 2024 and sell it today you would earn a total of 830.00 from holding Inventec Corp or generate 19.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Concord Securities Co vs. Inventec Corp
Performance |
| Timeline |
| Concord Securities |
| Inventec Corp |
Concord Securities and Inventec Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concord Securities and Inventec Corp
The main advantage of trading using opposite Concord Securities and Inventec Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concord Securities position performs unexpectedly, Inventec Corp 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 Inventec Corp will offset losses from the drop in Inventec Corp's long position.| Concord Securities vs. Hung Sheng Construction | Concord Securities vs. Mercuries Life Insurance | Concord Securities vs. Sinher Technology | Concord Securities vs. YungShin Global Holding |
| Inventec Corp vs. Novatek Microelectronics Corp | Inventec Corp vs. Quanta Computer | Inventec Corp vs. United Microelectronics |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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