Correlation Between Compal Broadband and Antec
Can any of the company-specific risk be diversified away by investing in both Compal Broadband and Antec 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 Antec 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 Antec Inc, you can compare the effects of market volatilities on Compal Broadband and Antec 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 Antec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Broadband and Antec.
Diversification Opportunities for Compal Broadband and Antec
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Compal and Antec is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Compal Broadband Networks and Antec Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antec Inc 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 Antec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antec Inc has no effect on the direction of Compal Broadband i.e., Compal Broadband and Antec go up and down completely randomly.
Pair Corralation between Compal Broadband and Antec
Assuming the 90 days trading horizon Compal Broadband Networks is expected to generate 1.42 times more return on investment than Antec. However, Compal Broadband is 1.42 times more volatile than Antec Inc. It trades about 0.04 of its potential returns per unit of risk. Antec Inc is currently generating about -0.29 per unit of risk. If you would invest 2,350 in Compal Broadband Networks on November 3, 2024 and sell it today you would earn a total of 20.00 from holding Compal Broadband Networks or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compal Broadband Networks vs. Antec Inc
Performance |
| Timeline |
| Compal Broadband Networks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Antec Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Compal Broadband and Antec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Broadband and Antec
The main advantage of trading using opposite Compal Broadband and Antec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Broadband position performs unexpectedly, Antec 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 Antec will offset losses from the drop in Antec's long position.The idea behind Compal Broadband Networks and Antec Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |