Correlation Between Display Tech and Chinyang Hold
Can any of the company-specific risk be diversified away by investing in both Display Tech and Chinyang Hold 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 Display Tech and Chinyang Hold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Display Tech Co and Chinyang Hold, you can compare the effects of market volatilities on Display Tech and Chinyang Hold 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 Display Tech with a short position of Chinyang Hold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Display Tech and Chinyang Hold.
Diversification Opportunities for Display Tech and Chinyang Hold
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Display and Chinyang is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Display Tech Co and Chinyang Hold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinyang Hold and Display Tech 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 Display Tech Co are associated (or correlated) with Chinyang Hold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinyang Hold has no effect on the direction of Display Tech i.e., Display Tech and Chinyang Hold go up and down completely randomly.
Pair Corralation between Display Tech and Chinyang Hold
Assuming the 90 days trading horizon Display Tech Co is expected to under-perform the Chinyang Hold. In addition to that, Display Tech is 6.75 times more volatile than Chinyang Hold. It trades about -0.17 of its total potential returns per unit of risk. Chinyang Hold is currently generating about -0.29 per unit of volatility. If you would invest 318,500 in Chinyang Hold on September 12, 2024 and sell it today you would lose (9,500) from holding Chinyang Hold or give up 2.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Display Tech Co vs. Chinyang Hold
Performance |
| Timeline |
| Display Tech |
| Chinyang Hold |
Display Tech and Chinyang Hold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Display Tech and Chinyang Hold
The main advantage of trading using opposite Display Tech and Chinyang Hold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Display Tech position performs unexpectedly, Chinyang Hold 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 Chinyang Hold will offset losses from the drop in Chinyang Hold's long position.| Display Tech vs. Samsung Electronics Co | Display Tech vs. Samsung Electronics Co | Display Tech vs. SK Hynix | Display Tech vs. POSCO Holdings |
| Chinyang Hold vs. LG Chemicals | Chinyang Hold vs. POSCO Holdings | Chinyang Hold vs. Hanwha Solutions | Chinyang Hold vs. Lotte Chemical Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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