Correlation Between Compal Electronics and Dunedin Enterprise
Can any of the company-specific risk be diversified away by investing in both Compal Electronics and Dunedin Enterprise 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 Dunedin Enterprise 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 Dunedin Enterprise Investment, you can compare the effects of market volatilities on Compal Electronics and Dunedin Enterprise 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 Dunedin Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and Dunedin Enterprise.
Diversification Opportunities for Compal Electronics and Dunedin Enterprise
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compal and Dunedin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR and Dunedin Enterprise Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunedin Enterprise 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 Dunedin Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunedin Enterprise has no effect on the direction of Compal Electronics i.e., Compal Electronics and Dunedin Enterprise go up and down completely randomly.
Pair Corralation between Compal Electronics and Dunedin Enterprise
If you would invest 49,200 in Dunedin Enterprise Investment on September 3, 2024 and sell it today you would earn a total of 550.00 from holding Dunedin Enterprise Investment or generate 1.12% 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. Dunedin Enterprise Investment
Performance |
| Timeline |
| Compal Electronics GDR |
| Dunedin Enterprise |
Compal Electronics and Dunedin Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Electronics and Dunedin Enterprise
The main advantage of trading using opposite Compal Electronics and Dunedin Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics position performs unexpectedly, Dunedin Enterprise 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 Dunedin Enterprise will offset losses from the drop in Dunedin Enterprise's long position.| Compal Electronics vs. Samsung Electronics Co | Compal Electronics vs. Samsung Electronics Co | Compal Electronics vs. Hyundai Motor | Compal Electronics vs. Toyota Motor Corp |
| Dunedin Enterprise vs. Deltex Medical Group | Dunedin Enterprise vs. Pets at Home | Dunedin Enterprise vs. CAP LEASE AVIATION | Dunedin Enterprise vs. Ecclesiastical Insurance Office |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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