Correlation Between Coretronic and Quanta Computer
Can any of the company-specific risk be diversified away by investing in both Coretronic 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 Coretronic and Quanta Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coretronic and Quanta Computer, you can compare the effects of market volatilities on Coretronic 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 Coretronic with a short position of Quanta Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coretronic and Quanta Computer.
Diversification Opportunities for Coretronic and Quanta Computer
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coretronic and Quanta is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Coretronic and Quanta Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanta Computer and Coretronic 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 Coretronic 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 Coretronic i.e., Coretronic and Quanta Computer go up and down completely randomly.
Pair Corralation between Coretronic and Quanta Computer
Assuming the 90 days trading horizon Coretronic is expected to generate 2.44 times less return on investment than Quanta Computer. But when comparing it to its historical volatility, Coretronic is 1.24 times less risky than Quanta Computer. It trades about 0.06 of its potential returns per unit of risk. Quanta Computer is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 7,120 in Quanta Computer on September 26, 2024 and sell it today you would earn a total of 21,980 from holding Quanta Computer or generate 308.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.79% |
Values | Daily Returns |
Coretronic vs. Quanta Computer
Performance |
Timeline |
Coretronic |
Quanta Computer |
Coretronic and Quanta Computer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coretronic and Quanta Computer
The main advantage of trading using opposite Coretronic and Quanta Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coretronic 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.Coretronic vs. Chicony Power Technology | Coretronic vs. Merry Electronics Co | Coretronic vs. Sampo Corp | Coretronic vs. Taiwan Sanyo Electric |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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