Correlation Between ChipsMedia and Chin Yang
Can any of the company-specific risk be diversified away by investing in both ChipsMedia and Chin Yang 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 ChipsMedia and Chin Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChipsMedia and Chin Yang Chemical, you can compare the effects of market volatilities on ChipsMedia and Chin Yang 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 ChipsMedia with a short position of Chin Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChipsMedia and Chin Yang.
Diversification Opportunities for ChipsMedia and Chin Yang
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between ChipsMedia and Chin is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding ChipsMedia and Chin Yang Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chin Yang Chemical and ChipsMedia 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 ChipsMedia are associated (or correlated) with Chin Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chin Yang Chemical has no effect on the direction of ChipsMedia i.e., ChipsMedia and Chin Yang go up and down completely randomly.
Pair Corralation between ChipsMedia and Chin Yang
Assuming the 90 days trading horizon ChipsMedia is expected to generate 0.92 times more return on investment than Chin Yang. However, ChipsMedia is 1.08 times less risky than Chin Yang. It trades about -0.1 of its potential returns per unit of risk. Chin Yang Chemical is currently generating about -0.19 per unit of risk. If you would invest 1,406,000 in ChipsMedia on September 5, 2024 and sell it today you would lose (116,000) from holding ChipsMedia or give up 8.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChipsMedia vs. Chin Yang Chemical
Performance |
| Timeline |
| ChipsMedia |
| Chin Yang Chemical |
ChipsMedia and Chin Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChipsMedia and Chin Yang
The main advantage of trading using opposite ChipsMedia and Chin Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChipsMedia position performs unexpectedly, Chin Yang 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 Chin Yang will offset losses from the drop in Chin Yang's long position.| ChipsMedia vs. Dongsin Engineering Construction | ChipsMedia vs. Doosan Fuel Cell | ChipsMedia vs. Daishin Balance 1 | ChipsMedia vs. Total Soft Bank |
| Chin Yang vs. Lotte Data Communication | Chin Yang vs. TJ media Co | Chin Yang vs. ChipsMedia | Chin Yang vs. Korea Computer |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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