Correlation Between Compal Electronics and ONEOK

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

By analyzing existing cross correlation between Compal Electronics GDR and ONEOK Inc, you can compare the effects of market volatilities on Compal Electronics and ONEOK 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 Compal Electronics with a short position of ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and ONEOK.

Diversification Opportunities for Compal Electronics and ONEOK

0.0

Correlation Coefficient

Compal Electronics  ONEOK

Pay attention - limited upside

The 3 months correlation between Compal and ONEOK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc and Compal Electronics 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 Compal Electronics GDR are associated (or correlated) with ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of Compal Electronics i.e., Compal Electronics and ONEOK go up and down completely randomly.

Pair Corralation between Compal Electronics and ONEOK

If you would invest  10,058  in ONEOK Inc on October 22, 2024 and sell it today you would earn a total of  910.00  from holding ONEOK Inc or generate 9.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Compal Electronics GDR  vs.  ONEOK Inc

Compal Electronics GDR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compal Electronics GDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Compal Electronics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ONEOK Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ONEOK Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, ONEOK unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compal Electronics and ONEOK

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

The idea behind Compal Electronics GDR and ONEOK Inc 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.