Correlation Between Quanta Storage and Data International
Can any of the company-specific risk be diversified away by investing in both Quanta Storage and Data International 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 Data International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanta Storage and Data International Co, you can compare the effects of market volatilities on Quanta Storage and Data International 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 Data International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanta Storage and Data International.
Diversification Opportunities for Quanta Storage and Data International
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Quanta and Data is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Quanta Storage and Data International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data International 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 Data International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data International has no effect on the direction of Quanta Storage i.e., Quanta Storage and Data International go up and down completely randomly.
Pair Corralation between Quanta Storage and Data International
Assuming the 90 days trading horizon Quanta Storage is expected to under-perform the Data International. But the stock apears to be less risky and, when comparing its historical volatility, Quanta Storage is 1.24 times less risky than Data International. The stock trades about -0.06 of its potential returns per unit of risk. The Data International Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 22,500 in Data International Co on September 1, 2024 and sell it today you would lose (5,800) from holding Data International Co or give up 25.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quanta Storage vs. Data International Co
Performance |
| Timeline |
| Quanta Storage |
| Data International |
Quanta Storage and Data International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanta Storage and Data International
The main advantage of trading using opposite Quanta Storage and Data International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanta Storage position performs unexpectedly, Data International 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 Data International will offset losses from the drop in Data International's long position.| Quanta Storage vs. Qisda Corp | Quanta Storage vs. Quanta Computer | Quanta Storage vs. Coretronic | Quanta Storage vs. Wistron Corp |
| Data International vs. ReaLy Development Construction | Data International vs. Oceanic Beverages Co | Data International vs. Fulin Plastic Industry | Data International vs. Huang Hsiang Construction |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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