Correlation Between Brighten Optix and Quanta Computer

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

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

Diversification Opportunities for Brighten Optix and Quanta Computer

0.07

Correlation Coefficient

Brighten Optix  Quanta Computer

Significant diversification

The 3 months correlation between Brighten and Quanta is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Brighten Optix and Quanta Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanta Computer and Brighten Optix 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 Brighten Optix 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 Brighten Optix i.e., Brighten Optix and Quanta Computer go up and down completely randomly.

Pair Corralation between Brighten Optix and Quanta Computer

Assuming the 90 days trading horizon Brighten Optix is expected to generate 0.95 times more return on investment than Quanta Computer. However, Brighten Optix is 1.05 times less risky than Quanta Computer. It trades about 0.04 of its potential returns per unit of risk. Quanta Computer is currently generating about -0.09 per unit of risk. If you would invest  13,650  in Brighten Optix on December 4, 2024 and sell it today you would earn a total of  500.00  from holding Brighten Optix or generate 3.66% return on investment over 90 days.

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

Brighten Optix  vs.  Quanta Computer

Brighten Optix

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Brighten Optix are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Brighten Optix 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

Very 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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Brighten Optix and Quanta Computer

The main advantage of trading using opposite Brighten Optix and Quanta Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brighten Optix 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 Brighten Optix 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 Channel module to use Commodity Channel Index to analyze current equity momentum.