Correlation Between Chin Yang and SIMMTECH
Can any of the company-specific risk be diversified away by investing in both Chin Yang and SIMMTECH 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 SIMMTECH 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 SIMMTECH Co, you can compare the effects of market volatilities on Chin Yang and SIMMTECH 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 SIMMTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chin Yang and SIMMTECH.
Diversification Opportunities for Chin Yang and SIMMTECH
Average diversification
The 3 months correlation between Chin and SIMMTECH is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Chin Yang Chemical and SIMMTECH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMMTECH 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 SIMMTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIMMTECH has no effect on the direction of Chin Yang i.e., Chin Yang and SIMMTECH go up and down completely randomly.
Pair Corralation between Chin Yang and SIMMTECH
Assuming the 90 days trading horizon Chin Yang Chemical is expected to generate 1.09 times more return on investment than SIMMTECH. However, Chin Yang is 1.09 times more volatile than SIMMTECH Co. It trades about 0.07 of its potential returns per unit of risk. SIMMTECH Co is currently generating about -0.15 per unit of risk. If you would invest 282,026 in Chin Yang Chemical on September 14, 2024 and sell it today you would earn a total of 137,974 from holding Chin Yang Chemical or generate 48.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chin Yang Chemical vs. SIMMTECH Co
Performance |
| Timeline |
| Chin Yang Chemical |
| SIMMTECH |
Chin Yang and SIMMTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chin Yang and SIMMTECH
The main advantage of trading using opposite Chin Yang and SIMMTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chin Yang position performs unexpectedly, SIMMTECH 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 SIMMTECH will offset losses from the drop in SIMMTECH's long position.| Chin Yang vs. Kyung In Synthetic Corp | Chin Yang vs. Nh Investment And | Chin Yang vs. Hannong Chemicals | Chin Yang vs. TK Chemical |
| SIMMTECH vs. Hana Technology Co | SIMMTECH vs. Pungguk Ethanol Industrial | SIMMTECH vs. Samsung Life Insurance | SIMMTECH vs. Dongbu Insurance Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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