Correlation Between Compal Broadband and Macroblock
Can any of the company-specific risk be diversified away by investing in both Compal Broadband and Macroblock 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 Macroblock 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 Macroblock, you can compare the effects of market volatilities on Compal Broadband and Macroblock 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 Macroblock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Broadband and Macroblock.
Diversification Opportunities for Compal Broadband and Macroblock
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compal and Macroblock is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Compal Broadband Networks and Macroblock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macroblock 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 Macroblock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macroblock has no effect on the direction of Compal Broadband i.e., Compal Broadband and Macroblock go up and down completely randomly.
Pair Corralation between Compal Broadband and Macroblock
Assuming the 90 days trading horizon Compal Broadband Networks is expected to generate 1.38 times more return on investment than Macroblock. However, Compal Broadband is 1.38 times more volatile than Macroblock. It trades about 0.0 of its potential returns per unit of risk. Macroblock is currently generating about -0.07 per unit of risk. If you would invest 2,660 in Compal Broadband Networks on September 14, 2024 and sell it today you would lose (215.00) from holding Compal Broadband Networks or give up 8.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.62% |
| Values | Daily Returns |
Compal Broadband Networks vs. Macroblock
Performance |
| Timeline |
| Compal Broadband Networks |
| Macroblock |
Compal Broadband and Macroblock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Broadband and Macroblock
The main advantage of trading using opposite Compal Broadband and Macroblock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Broadband position performs unexpectedly, Macroblock 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 Macroblock will offset losses from the drop in Macroblock's long position.| Compal Broadband vs. Loop Telecommunication International | Compal Broadband vs. Arcadyan Technology Corp | Compal Broadband vs. Hitron Technologies | Compal Broadband vs. EZconn Corp |
| Macroblock vs. Holiday Entertainment Co | Macroblock vs. U Media Communications | Macroblock vs. Compal Broadband Networks | Macroblock vs. Asia Metal Industries |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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