Correlation Between Compal Electronics and Metso Outotec
Can any of the company-specific risk be diversified away by investing in both Compal Electronics and Metso Outotec 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 Metso Outotec 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 Metso Outotec Corp, you can compare the effects of market volatilities on Compal Electronics and Metso Outotec 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 Metso Outotec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and Metso Outotec.
Diversification Opportunities for Compal Electronics and Metso Outotec
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compal and Metso is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR and Metso Outotec Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metso Outotec Corp 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 Metso Outotec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metso Outotec Corp has no effect on the direction of Compal Electronics i.e., Compal Electronics and Metso Outotec go up and down completely randomly.
Pair Corralation between Compal Electronics and Metso Outotec
Assuming the 90 days trading horizon Compal Electronics GDR is expected to generate 1.53 times more return on investment than Metso Outotec. However, Compal Electronics is 1.53 times more volatile than Metso Outotec Corp. It trades about 0.02 of its potential returns per unit of risk. Metso Outotec Corp is currently generating about 0.0 per unit of risk. If you would invest 307.00 in Compal Electronics GDR on September 4, 2024 and sell it today you would earn a total of 3.00 from holding Compal Electronics GDR or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Compal Electronics GDR vs. Metso Outotec Corp
Performance |
| Timeline |
| Compal Electronics GDR |
| Metso Outotec Corp |
Compal Electronics and Metso Outotec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Electronics and Metso Outotec
The main advantage of trading using opposite Compal Electronics and Metso Outotec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics position performs unexpectedly, Metso Outotec 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 Metso Outotec will offset losses from the drop in Metso Outotec's long position.| Compal Electronics vs. Samsung Electronics Co | Compal Electronics vs. Samsung Electronics Co | Compal Electronics vs. Toyota Motor Corp | Compal Electronics vs. Hon Hai Precision |
| Metso Outotec vs. Telecom Italia SpA | Metso Outotec vs. Associated British Foods | Metso Outotec vs. Leroy Seafood Group | Metso Outotec vs. Roebuck Food Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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