Correlation Between ChipsMedia and Lion Chemtech
Can any of the company-specific risk be diversified away by investing in both ChipsMedia and Lion Chemtech 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 Lion Chemtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChipsMedia and Lion Chemtech Co, you can compare the effects of market volatilities on ChipsMedia and Lion Chemtech 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 Lion Chemtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChipsMedia and Lion Chemtech.
Diversification Opportunities for ChipsMedia and Lion Chemtech
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ChipsMedia and Lion is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding ChipsMedia and Lion Chemtech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Chemtech 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 Lion Chemtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Chemtech has no effect on the direction of ChipsMedia i.e., ChipsMedia and Lion Chemtech go up and down completely randomly.
Pair Corralation between ChipsMedia and Lion Chemtech
Assuming the 90 days trading horizon ChipsMedia is expected to generate 1.04 times more return on investment than Lion Chemtech. However, ChipsMedia is 1.04 times more volatile than Lion Chemtech Co. It trades about 0.09 of its potential returns per unit of risk. Lion Chemtech Co is currently generating about 0.06 per unit of risk. If you would invest 1,365,000 in ChipsMedia on August 28, 2024 and sell it today you would earn a total of 75,000 from holding ChipsMedia or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChipsMedia vs. Lion Chemtech Co
Performance |
| Timeline |
| ChipsMedia |
| Lion Chemtech |
ChipsMedia and Lion Chemtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChipsMedia and Lion Chemtech
The main advantage of trading using opposite ChipsMedia and Lion Chemtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChipsMedia position performs unexpectedly, Lion Chemtech 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 Lion Chemtech will offset losses from the drop in Lion Chemtech's long position.| ChipsMedia vs. Korea Real Estate | ChipsMedia vs. Korea Ratings Co | ChipsMedia vs. IQuest Co | ChipsMedia vs. Wonbang Tech Co |
| Lion Chemtech vs. Automobile Pc | Lion Chemtech vs. Sunny Electronics Corp | Lion Chemtech vs. Sangshin Electronics Co | Lion Chemtech vs. ChipsMedia |
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 CEOs Directory module to screen CEOs from public companies around the world.
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