Correlation Between Compal Electronics and Spire Healthcare
Can any of the company-specific risk be diversified away by investing in both Compal Electronics and Spire Healthcare 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 Spire Healthcare 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 Spire Healthcare Group, you can compare the effects of market volatilities on Compal Electronics and Spire Healthcare 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 Spire Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and Spire Healthcare.
Diversification Opportunities for Compal Electronics and Spire Healthcare
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compal and Spire is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR and Spire Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Healthcare 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 Spire Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Healthcare has no effect on the direction of Compal Electronics i.e., Compal Electronics and Spire Healthcare go up and down completely randomly.
Pair Corralation between Compal Electronics and Spire Healthcare
Assuming the 90 days trading horizon Compal Electronics GDR is expected to generate 2.35 times more return on investment than Spire Healthcare. However, Compal Electronics is 2.35 times more volatile than Spire Healthcare Group. It trades about 0.01 of its potential returns per unit of risk. Spire Healthcare Group is currently generating about 0.01 per unit of risk. If you would invest 307.00 in Compal Electronics GDR on September 14, 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 | 99.63% |
| Values | Daily Returns |
Compal Electronics GDR vs. Spire Healthcare Group
Performance |
| Timeline |
| Compal Electronics GDR |
| Spire Healthcare |
Compal Electronics and Spire Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Electronics and Spire Healthcare
The main advantage of trading using opposite Compal Electronics and Spire Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics position performs unexpectedly, Spire Healthcare 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 Spire Healthcare will offset losses from the drop in Spire Healthcare's long position.| Compal Electronics vs. Hyundai Motor | Compal Electronics vs. Toyota Motor Corp | Compal Electronics vs. SoftBank Group Corp | Compal Electronics vs. Halyk Bank of |
| Spire Healthcare vs. Universal Display Corp | Spire Healthcare vs. JD Sports Fashion | Spire Healthcare vs. Compal Electronics GDR | Spire Healthcare vs. Zinc Media 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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