Correlation Between Compal Electronics and United Internet
Can any of the company-specific risk be diversified away by investing in both Compal Electronics and United Internet 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 Electronics and United Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compal Electronics GDR and United Internet AG, you can compare the effects of market volatilities on Compal Electronics and United Internet 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 Electronics with a short position of United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and United Internet.
Diversification Opportunities for Compal Electronics and United Internet
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compal and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR and United Internet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Internet AG and Compal Electronics 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 Electronics GDR are associated (or correlated) with United Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Internet AG has no effect on the direction of Compal Electronics i.e., Compal Electronics and United Internet go up and down completely randomly.
Pair Corralation between Compal Electronics and United Internet
If you would invest 1,603 in United Internet AG on September 13, 2024 and sell it today you would earn a total of 41.00 from holding United Internet AG or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compal Electronics GDR vs. United Internet AG
Performance |
| Timeline |
| Compal Electronics GDR |
| United Internet AG |
Compal Electronics and United Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Electronics and United Internet
The main advantage of trading using opposite Compal Electronics and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics position performs unexpectedly, United Internet 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 United Internet will offset losses from the drop in United Internet's long position.| Compal Electronics vs. Planet Fitness Cl | Compal Electronics vs. Inspiration Healthcare Group | Compal Electronics vs. Cairo Communication SpA | Compal Electronics vs. Worldwide Healthcare Trust |
| United Internet vs. Samsung Electronics Co | United Internet vs. Samsung Electronics Co | United Internet vs. Hyundai Motor | United Internet vs. Reliance Industries Ltd |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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