Correlation Between Greatek Electronics and Topco Scientific
Can any of the company-specific risk be diversified away by investing in both Greatek Electronics and Topco Scientific 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 Greatek Electronics and Topco Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatek Electronics and Topco Scientific Co, you can compare the effects of market volatilities on Greatek Electronics and Topco Scientific 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 Greatek Electronics with a short position of Topco Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatek Electronics and Topco Scientific.
Diversification Opportunities for Greatek Electronics and Topco Scientific
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Greatek and Topco is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Greatek Electronics and Topco Scientific Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topco Scientific and Greatek 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 Greatek Electronics are associated (or correlated) with Topco Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topco Scientific has no effect on the direction of Greatek Electronics i.e., Greatek Electronics and Topco Scientific go up and down completely randomly.
Pair Corralation between Greatek Electronics and Topco Scientific
Assuming the 90 days trading horizon Greatek Electronics is expected to under-perform the Topco Scientific. But the stock apears to be less risky and, when comparing its historical volatility, Greatek Electronics is 1.5 times less risky than Topco Scientific. The stock trades about -0.01 of its potential returns per unit of risk. The Topco Scientific Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 28,150 in Topco Scientific Co on September 15, 2024 and sell it today you would earn a total of 1,850 from holding Topco Scientific Co or generate 6.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Greatek Electronics vs. Topco Scientific Co
Performance |
Timeline |
Greatek Electronics |
Topco Scientific |
Greatek Electronics and Topco Scientific Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Greatek Electronics and Topco Scientific
The main advantage of trading using opposite Greatek Electronics and Topco Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatek Electronics position performs unexpectedly, Topco Scientific 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 Topco Scientific will offset losses from the drop in Topco Scientific's long position.Greatek Electronics vs. King Yuan Electronics | Greatek Electronics vs. Powertech Technology | Greatek Electronics vs. Realtek Semiconductor Corp | Greatek Electronics vs. Elan Microelectronics Corp |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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