Correlation Between Compeq Manufacturing and Macronix International

Can any of the company-specific risk be diversified away by investing in both Compeq Manufacturing and Macronix International 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 Compeq Manufacturing and Macronix International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Compeq Manufacturing Co and Macronix International Co, you can compare the effects of market volatilities on Compeq Manufacturing and Macronix International 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 Compeq Manufacturing with a short position of Macronix International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compeq Manufacturing and Macronix International.

Diversification Opportunities for Compeq Manufacturing and Macronix International

-0.31

Correlation Coefficient

Compeq Manufacturing  Macronix International

Very good diversification

The 3 months correlation between Compeq and Macronix is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Compeq Manufacturing Co and Macronix International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macronix International and Compeq Manufacturing 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 Compeq Manufacturing Co are associated (or correlated) with Macronix International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macronix International has no effect on the direction of Compeq Manufacturing i.e., Compeq Manufacturing and Macronix International go up and down completely randomly.

Pair Corralation between Compeq Manufacturing and Macronix International

Assuming the 90 days trading horizon Compeq Manufacturing Co is expected to under-perform the Macronix International. But the stock apears to be less risky and, when comparing its historical volatility, Compeq Manufacturing Co is 1.41 times less risky than Macronix International. The stock trades about -0.02 of its potential returns per unit of risk. The Macronix International Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1,880  in Macronix International Co on December 5, 2024 and sell it today you would earn a total of  230.00  from holding Macronix International Co or generate 12.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Compeq Manufacturing Co  vs.  Macronix International Co

Compeq Manufacturing

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Compeq Manufacturing Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Compeq Manufacturing may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Macronix International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Macronix International Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Macronix International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Compeq Manufacturing and Macronix International

The main advantage of trading using opposite Compeq Manufacturing and Macronix International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compeq Manufacturing position performs unexpectedly, Macronix International 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 Macronix International will offset losses from the drop in Macronix International's long position.

The idea behind Compeq Manufacturing Co and Macronix International Co 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.