Correlation Between Compal Broadband and Hunya Foods
Can any of the company-specific risk be diversified away by investing in both Compal Broadband and Hunya Foods 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 Compal Broadband and Hunya Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compal Broadband Networks and Hunya Foods Co, you can compare the effects of market volatilities on Compal Broadband and Hunya Foods 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 Compal Broadband with a short position of Hunya Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Broadband and Hunya Foods.
Diversification Opportunities for Compal Broadband and Hunya Foods
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compal and Hunya is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Compal Broadband Networks and Hunya Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunya Foods and Compal Broadband 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 Compal Broadband Networks are associated (or correlated) with Hunya Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunya Foods has no effect on the direction of Compal Broadband i.e., Compal Broadband and Hunya Foods go up and down completely randomly.
Pair Corralation between Compal Broadband and Hunya Foods
Assuming the 90 days trading horizon Compal Broadband Networks is expected to generate 5.42 times more return on investment than Hunya Foods. However, Compal Broadband is 5.42 times more volatile than Hunya Foods Co. It trades about 0.15 of its potential returns per unit of risk. Hunya Foods Co is currently generating about -0.08 per unit of risk. If you would invest 2,465 in Compal Broadband Networks on August 29, 2024 and sell it today you would earn a total of 300.00 from holding Compal Broadband Networks or generate 12.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compal Broadband Networks vs. Hunya Foods Co
Performance |
| Timeline |
| Compal Broadband Networks |
| Hunya Foods |
Compal Broadband and Hunya Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Broadband and Hunya Foods
The main advantage of trading using opposite Compal Broadband and Hunya Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Broadband position performs unexpectedly, Hunya Foods 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 Hunya Foods will offset losses from the drop in Hunya Foods' long position.| Compal Broadband vs. Accton Technology Corp | Compal Broadband vs. Wistron NeWeb Corp | Compal Broadband vs. Arcadyan Technology Corp | Compal Broadband vs. Sercomm Corp |
| Hunya Foods vs. AGV Products Corp | Hunya Foods vs. Taisun Enterprise Co | Hunya Foods vs. De Licacy Industrial | Hunya Foods vs. Wisher Industrial Co |
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 Stocks Directory module to find actively traded stocks across global markets.
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