Correlation Between Compal Electronics and MG Credit
Can any of the company-specific risk be diversified away by investing in both Compal Electronics and MG Credit 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 MG Credit 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 MG Credit Income, you can compare the effects of market volatilities on Compal Electronics and MG Credit 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 MG Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and MG Credit.
Diversification Opportunities for Compal Electronics and MG Credit
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compal and MGCI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR and MG Credit Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MG Credit Income 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 MG Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MG Credit Income has no effect on the direction of Compal Electronics i.e., Compal Electronics and MG Credit go up and down completely randomly.
Pair Corralation between Compal Electronics and MG Credit
Assuming the 90 days trading horizon Compal Electronics is expected to generate 1.08 times less return on investment than MG Credit. In addition to that, Compal Electronics is 2.11 times more volatile than MG Credit Income. It trades about 0.02 of its total potential returns per unit of risk. MG Credit Income is currently generating about 0.03 per unit of volatility. If you would invest 8,896 in MG Credit Income on October 29, 2024 and sell it today you would earn a total of 884.00 from holding MG Credit Income or generate 9.94% 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. MG Credit Income
Performance |
| Timeline |
| Compal Electronics GDR |
| MG Credit Income |
Compal Electronics and MG Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Electronics and MG Credit
The main advantage of trading using opposite Compal Electronics and MG Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics position performs unexpectedly, MG Credit 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 MG Credit will offset losses from the drop in MG Credit's long position.| Compal Electronics vs. Ondine Biomedical | Compal Electronics vs. Adriatic Metals | Compal Electronics vs. Ecofin Global Utilities | Compal Electronics vs. Creo Medical Group |
| MG Credit vs. Gaztransport et Technigaz | MG Credit vs. MoneysupermarketCom Group PLC | MG Credit vs. Premier Foods PLC | MG Credit vs. First Class Metals |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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