Correlation Between Dunedin Enterprise and Compal Electronics
Can any of the company-specific risk be diversified away by investing in both Dunedin Enterprise and Compal Electronics 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 Dunedin Enterprise and Compal Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunedin Enterprise Investment and Compal Electronics GDR, you can compare the effects of market volatilities on Dunedin Enterprise and Compal Electronics 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 Dunedin Enterprise with a short position of Compal Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunedin Enterprise and Compal Electronics.
Diversification Opportunities for Dunedin Enterprise and Compal Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dunedin and Compal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dunedin Enterprise Investment and Compal Electronics GDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compal Electronics GDR and Dunedin Enterprise 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 Dunedin Enterprise Investment are associated (or correlated) with Compal Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compal Electronics GDR has no effect on the direction of Dunedin Enterprise i.e., Dunedin Enterprise and Compal Electronics go up and down completely randomly.
Pair Corralation between Dunedin Enterprise and Compal Electronics
Assuming the 90 days trading horizon Dunedin Enterprise is expected to generate 1.12 times less return on investment than Compal Electronics. But when comparing it to its historical volatility, Dunedin Enterprise Investment is 1.79 times less risky than Compal Electronics. It trades about 0.02 of its potential returns per unit of risk. Compal Electronics GDR is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 296.00 in Compal Electronics GDR on September 3, 2024 and sell it today you would earn a total of 14.00 from holding Compal Electronics GDR or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Dunedin Enterprise Investment vs. Compal Electronics GDR
Performance |
| Timeline |
| Dunedin Enterprise |
| Compal Electronics GDR |
Dunedin Enterprise and Compal Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunedin Enterprise and Compal Electronics
The main advantage of trading using opposite Dunedin Enterprise and Compal Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunedin Enterprise position performs unexpectedly, Compal Electronics 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 Compal Electronics will offset losses from the drop in Compal Electronics' long position.| Dunedin Enterprise vs. Deltex Medical Group | Dunedin Enterprise vs. Pets at Home | Dunedin Enterprise vs. CAP LEASE AVIATION | Dunedin Enterprise vs. Ecclesiastical Insurance Office |
| Compal Electronics vs. Samsung Electronics Co | Compal Electronics vs. Samsung Electronics Co | Compal Electronics vs. Hyundai Motor | Compal Electronics vs. Toyota Motor Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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