Correlation Between Compal Electronics and European Metals
Can any of the company-specific risk be diversified away by investing in both Compal Electronics and European Metals 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 European Metals 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 European Metals Holdings, you can compare the effects of market volatilities on Compal Electronics and European Metals 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 European Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and European Metals.
Diversification Opportunities for Compal Electronics and European Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compal and European is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR and European Metals Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Metals Holdings 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 European Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Metals Holdings has no effect on the direction of Compal Electronics i.e., Compal Electronics and European Metals go up and down completely randomly.
Pair Corralation between Compal Electronics and European Metals
If you would invest 310.00 in Compal Electronics GDR on September 24, 2024 and sell it today you would earn a total of 0.00 from holding Compal Electronics GDR or generate 0.0% 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. European Metals Holdings
Performance |
Timeline |
Compal Electronics GDR |
European Metals Holdings |
Compal Electronics and European Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Compal Electronics and European Metals
The main advantage of trading using opposite Compal Electronics and European Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics position performs unexpectedly, European Metals 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 European Metals will offset losses from the drop in European Metals' long position.Compal Electronics vs. Quadrise Plc | Compal Electronics vs. ImmuPharma PLC | Compal Electronics vs. Intuitive Investments Group | Compal Electronics vs. European Metals Holdings |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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