Correlation Between Chin Yang and Display Tech
Can any of the company-specific risk be diversified away by investing in both Chin Yang and Display Tech 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 Chin Yang and Display Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chin Yang Chemical and Display Tech Co, you can compare the effects of market volatilities on Chin Yang and Display Tech 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 Chin Yang with a short position of Display Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chin Yang and Display Tech.
Diversification Opportunities for Chin Yang and Display Tech
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chin and Display is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Chin Yang Chemical and Display Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Display Tech and Chin Yang 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 Chin Yang Chemical are associated (or correlated) with Display Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Display Tech has no effect on the direction of Chin Yang i.e., Chin Yang and Display Tech go up and down completely randomly.
Pair Corralation between Chin Yang and Display Tech
Assuming the 90 days trading horizon Chin Yang Chemical is expected to under-perform the Display Tech. In addition to that, Chin Yang is 2.7 times more volatile than Display Tech Co. It trades about -0.15 of its total potential returns per unit of risk. Display Tech Co is currently generating about -0.34 per unit of volatility. If you would invest 325,000 in Display Tech Co on August 28, 2024 and sell it today you would lose (28,000) from holding Display Tech Co or give up 8.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chin Yang Chemical vs. Display Tech Co
Performance |
| Timeline |
| Chin Yang Chemical |
| Display Tech |
Chin Yang and Display Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chin Yang and Display Tech
The main advantage of trading using opposite Chin Yang and Display Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chin Yang position performs unexpectedly, Display Tech 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 Display Tech will offset losses from the drop in Display Tech's long position.| Chin Yang vs. AptaBio Therapeutics | Chin Yang vs. Daewoo SBI SPAC | Chin Yang vs. Dream Security co | Chin Yang vs. Microfriend |
| Display Tech vs. Dongwon Metal Co | Display Tech vs. Chin Yang Chemical | Display Tech vs. Dongbang Transport Logistics | Display Tech vs. Heungkuk Metaltech CoLtd |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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