Correlation Between Great Computer and San Neng
Can any of the company-specific risk be diversified away by investing in both Great Computer and San Neng 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 Great Computer and San Neng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Computer and San Neng Group, you can compare the effects of market volatilities on Great Computer and San Neng 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 Great Computer with a short position of San Neng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Computer and San Neng.
Diversification Opportunities for Great Computer and San Neng
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Great and San is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Great Computer and San Neng Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Neng Group and Great Computer 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 Great Computer are associated (or correlated) with San Neng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Neng Group has no effect on the direction of Great Computer i.e., Great Computer and San Neng go up and down completely randomly.
Pair Corralation between Great Computer and San Neng
Assuming the 90 days trading horizon Great Computer is expected to generate 75.4 times more return on investment than San Neng. However, Great Computer is 75.4 times more volatile than San Neng Group. It trades about 0.05 of its potential returns per unit of risk. San Neng Group is currently generating about 0.04 per unit of risk. If you would invest 1,160 in Great Computer on September 2, 2024 and sell it today you would earn a total of 840.00 from holding Great Computer or generate 72.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Computer vs. San Neng Group
Performance |
| Timeline |
| Great Computer |
| San Neng Group |
Great Computer and San Neng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Computer and San Neng
The main advantage of trading using opposite Great Computer and San Neng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Computer position performs unexpectedly, San Neng 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 San Neng will offset losses from the drop in San Neng's long position.| Great Computer vs. Airtac International Group | Great Computer vs. TECO Electric Machinery | Great Computer vs. Chung Hsin Electric Machinery | Great Computer vs. Shihlin Electric Engineering |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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