Correlation Between Quanta Storage and Elitegroup Computer
Can any of the company-specific risk be diversified away by investing in both Quanta Storage and Elitegroup Computer 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 Quanta Storage and Elitegroup Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanta Storage and Elitegroup Computer Systems, you can compare the effects of market volatilities on Quanta Storage and Elitegroup Computer 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 Quanta Storage with a short position of Elitegroup Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanta Storage and Elitegroup Computer.
Diversification Opportunities for Quanta Storage and Elitegroup Computer
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Quanta and Elitegroup is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Quanta Storage and Elitegroup Computer Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elitegroup Computer and Quanta Storage 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 Quanta Storage are associated (or correlated) with Elitegroup Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elitegroup Computer has no effect on the direction of Quanta Storage i.e., Quanta Storage and Elitegroup Computer go up and down completely randomly.
Pair Corralation between Quanta Storage and Elitegroup Computer
Assuming the 90 days trading horizon Quanta Storage is expected to under-perform the Elitegroup Computer. But the stock apears to be less risky and, when comparing its historical volatility, Quanta Storage is 1.28 times less risky than Elitegroup Computer. The stock trades about -0.06 of its potential returns per unit of risk. The Elitegroup Computer Systems is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,465 in Elitegroup Computer Systems on August 27, 2024 and sell it today you would earn a total of 15.00 from holding Elitegroup Computer Systems or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quanta Storage vs. Elitegroup Computer Systems
Performance |
| Timeline |
| Quanta Storage |
| Elitegroup Computer |
Quanta Storage and Elitegroup Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanta Storage and Elitegroup Computer
The main advantage of trading using opposite Quanta Storage and Elitegroup Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanta Storage position performs unexpectedly, Elitegroup Computer 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 Elitegroup Computer will offset losses from the drop in Elitegroup Computer's long position.| Quanta Storage vs. Quanta Computer | Quanta Storage vs. Wiwynn Corp | Quanta Storage vs. Getac Technology Corp | Quanta Storage vs. IEI Integration Corp |
| Elitegroup Computer vs. Micro Star International Co | Elitegroup Computer vs. Gigabyte Technology Co | Elitegroup Computer vs. Compal Electronics | Elitegroup Computer vs. VIA Technologies |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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