Correlation Between Compal Electronics and Flow Traders
Can any of the company-specific risk be diversified away by investing in both Compal Electronics and Flow Traders 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 Flow Traders 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 Flow Traders NV, you can compare the effects of market volatilities on Compal Electronics and Flow Traders 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 Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and Flow Traders.
Diversification Opportunities for Compal Electronics and Flow Traders
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compal and Flow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR and Flow Traders NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Traders NV 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 Flow Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Traders NV has no effect on the direction of Compal Electronics i.e., Compal Electronics and Flow Traders go up and down completely randomly.
Pair Corralation between Compal Electronics and Flow Traders
If you would invest 2,414 in Flow Traders NV on December 2, 2024 and sell it today you would earn a total of 129.00 from holding Flow Traders NV or generate 5.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Compal Electronics GDR vs. Flow Traders NV
Performance |
Timeline |
Compal Electronics GDR |
Flow Traders NV |
Compal Electronics and Flow Traders Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Compal Electronics and Flow Traders
The main advantage of trading using opposite Compal Electronics and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics position performs unexpectedly, Flow Traders 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 Flow Traders will offset losses from the drop in Flow Traders' long position.Compal Electronics vs. Universal Display Corp | Compal Electronics vs. JD Sports Fashion | Compal Electronics vs. Live Nation Entertainment | Compal Electronics vs. Travel Leisure Co |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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