Correlation Between Compal Electronics and Summit Materials
Can any of the company-specific risk be diversified away by investing in both Compal Electronics and Summit Materials 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 Summit Materials 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 Summit Materials Cl, you can compare the effects of market volatilities on Compal Electronics and Summit Materials 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 Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and Summit Materials.
Diversification Opportunities for Compal Electronics and Summit Materials
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compal and Summit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR and Summit Materials Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials 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 Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of Compal Electronics i.e., Compal Electronics and Summit Materials go up and down completely randomly.
Pair Corralation between Compal Electronics and Summit Materials
If you would invest 5,091 in Summit Materials Cl on October 11, 2024 and sell it today you would earn a total of 118.00 from holding Summit Materials Cl or generate 2.32% 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. Summit Materials Cl
Performance |
| Timeline |
| Compal Electronics GDR |
| Summit Materials |
Compal Electronics and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Electronics and Summit Materials
The main advantage of trading using opposite Compal Electronics and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' long position.| Compal Electronics vs. National Beverage Corp | Compal Electronics vs. MoneysupermarketCom Group PLC | Compal Electronics vs. St Galler Kantonalbank | Compal Electronics vs. Ebro Foods |
| Summit Materials vs. Liontrust Asset Management | Summit Materials vs. Silver Bullet Data | Summit Materials vs. Ion Beam Applications | Summit Materials vs. Compal Electronics GDR |
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.
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