Correlation Between Compal Electronics and Chrysalis Investments

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Can any of the company-specific risk be diversified away by investing in both Compal Electronics and Chrysalis Investments 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 Chrysalis Investments 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 Chrysalis Investments, you can compare the effects of market volatilities on Compal Electronics and Chrysalis Investments 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 Chrysalis Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and Chrysalis Investments.

Diversification Opportunities for Compal Electronics and Chrysalis Investments

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Compal and Chrysalis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR and Chrysalis Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chrysalis Investments 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 Chrysalis Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chrysalis Investments has no effect on the direction of Compal Electronics i.e., Compal Electronics and Chrysalis Investments go up and down completely randomly.

Pair Corralation between Compal Electronics and Chrysalis Investments

If you would invest  8,950  in Chrysalis Investments on September 13, 2024 and sell it today you would earn a total of  820.00  from holding Chrysalis Investments or generate 9.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Compal Electronics GDR  vs.  Chrysalis Investments

 Performance 
       Timeline  
Compal Electronics GDR 

Risk-Adjusted Performance

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Over the last 90 days Compal Electronics GDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Compal Electronics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Chrysalis Investments 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Chrysalis Investments are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Chrysalis Investments unveiled solid returns over the last few months and may actually be approaching a breakup point.

Compal Electronics and Chrysalis Investments Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Compal Electronics and Chrysalis Investments

The main advantage of trading using opposite Compal Electronics and Chrysalis Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics position performs unexpectedly, Chrysalis Investments 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 Chrysalis Investments will offset losses from the drop in Chrysalis Investments' long position.
The idea behind Compal Electronics GDR and Chrysalis Investments pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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