Correlation Between Compal Broadband and Brogent Technologies
Can any of the company-specific risk be diversified away by investing in both Compal Broadband and Brogent Technologies 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 Brogent Technologies 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 Brogent Technologies, you can compare the effects of market volatilities on Compal Broadband and Brogent Technologies 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 Brogent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Broadband and Brogent Technologies.
Diversification Opportunities for Compal Broadband and Brogent Technologies
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Compal and Brogent is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Compal Broadband Networks and Brogent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brogent Technologies 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 Brogent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brogent Technologies has no effect on the direction of Compal Broadband i.e., Compal Broadband and Brogent Technologies go up and down completely randomly.
Pair Corralation between Compal Broadband and Brogent Technologies
Assuming the 90 days trading horizon Compal Broadband Networks is expected to generate 1.68 times more return on investment than Brogent Technologies. However, Compal Broadband is 1.68 times more volatile than Brogent Technologies. It trades about 0.05 of its potential returns per unit of risk. Brogent Technologies is currently generating about -0.12 per unit of risk. If you would invest 2,390 in Compal Broadband Networks on September 14, 2024 and sell it today you would earn a total of 65.00 from holding Compal Broadband Networks or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compal Broadband Networks vs. Brogent Technologies
Performance |
| Timeline |
| Compal Broadband Networks |
| Brogent Technologies |
Compal Broadband and Brogent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Broadband and Brogent Technologies
The main advantage of trading using opposite Compal Broadband and Brogent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Broadband position performs unexpectedly, Brogent Technologies 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 Brogent Technologies will offset losses from the drop in Brogent Technologies' long position.| Compal Broadband vs. Loop Telecommunication International | Compal Broadband vs. Arcadyan Technology Corp | Compal Broadband vs. Hitron Technologies | Compal Broadband vs. EZconn Corp |
| Brogent Technologies vs. Cameo Communications | Brogent Technologies vs. Arima Communications Corp | Brogent Technologies vs. Farglory FTZ Investment | Brogent Technologies vs. International CSRC Investment |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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