Correlation Between NEXCOM International and Highlight Tech
Can any of the company-specific risk be diversified away by investing in both NEXCOM International and Highlight Tech 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 NEXCOM International and Highlight Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXCOM International Co and Highlight Tech, you can compare the effects of market volatilities on NEXCOM International and Highlight Tech 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 NEXCOM International with a short position of Highlight Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXCOM International and Highlight Tech.
Diversification Opportunities for NEXCOM International and Highlight Tech
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NEXCOM and Highlight is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding NEXCOM International Co and Highlight Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highlight Tech and NEXCOM International 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 NEXCOM International Co are associated (or correlated) with Highlight Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highlight Tech has no effect on the direction of NEXCOM International i.e., NEXCOM International and Highlight Tech go up and down completely randomly.
Pair Corralation between NEXCOM International and Highlight Tech
Assuming the 90 days trading horizon NEXCOM International Co is expected to generate 2.23 times more return on investment than Highlight Tech. However, NEXCOM International is 2.23 times more volatile than Highlight Tech. It trades about 0.11 of its potential returns per unit of risk. Highlight Tech is currently generating about -0.52 per unit of risk. If you would invest 4,830 in NEXCOM International Co on September 4, 2024 and sell it today you would earn a total of 220.00 from holding NEXCOM International Co or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEXCOM International Co vs. Highlight Tech
Performance |
| Timeline |
| NEXCOM International |
| Highlight Tech |
NEXCOM International and Highlight Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXCOM International and Highlight Tech
The main advantage of trading using opposite NEXCOM International and Highlight Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXCOM International position performs unexpectedly, Highlight Tech 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 Highlight Tech will offset losses from the drop in Highlight Tech's long position.| NEXCOM International vs. Highlight Tech | NEXCOM International vs. Chicony Power Technology | NEXCOM International vs. Air Asia Co | NEXCOM International vs. Voltronic Power Technology |
| Highlight Tech vs. WiseChip Semiconductor | Highlight Tech vs. Novatek Microelectronics Corp | Highlight Tech vs. Leader Electronics | Highlight Tech vs. Information Technology Total |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |