Correlation Between IEI Integration and Quanta Computer

Can any of the company-specific risk be diversified away by investing in both IEI Integration and Quanta Computer 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 IEI Integration and Quanta Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IEI Integration Corp and Quanta Computer, you can compare the effects of market volatilities on IEI Integration and Quanta Computer 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 IEI Integration with a short position of Quanta Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of IEI Integration and Quanta Computer.

Diversification Opportunities for IEI Integration and Quanta Computer

-0.19

Correlation Coefficient

IEI Integration  Quanta Computer

Good diversification

The 3 months correlation between IEI and Quanta is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding IEI Integration Corp and Quanta Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanta Computer and IEI Integration 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 IEI Integration Corp are associated (or correlated) with Quanta Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanta Computer has no effect on the direction of IEI Integration i.e., IEI Integration and Quanta Computer go up and down completely randomly.

Pair Corralation between IEI Integration and Quanta Computer

Assuming the 90 days trading horizon IEI Integration is expected to generate 10.38 times less return on investment than Quanta Computer. But when comparing it to its historical volatility, IEI Integration Corp is 1.46 times less risky than Quanta Computer. It trades about 0.01 of its potential returns per unit of risk. Quanta Computer is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  7,630  in Quanta Computer on October 12, 2024 and sell it today you would earn a total of  20,720  from holding Quanta Computer or generate 271.56% return on investment over 90 days.

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

IEI Integration Corp  vs.  Quanta Computer

IEI Integration Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Quanta Computer

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Quanta Computer has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Quanta Computer 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 IEI Integration and Quanta Computer

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

The idea behind IEI Integration Corp and Quanta Computer 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 Commodity Directory module to find actively traded commodities issued by global exchanges.