Correlation Between Hunya Foods and Ching Feng
Can any of the company-specific risk be diversified away by investing in both Hunya Foods and Ching Feng 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 Hunya Foods and Ching Feng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hunya Foods Co and Ching Feng Home, you can compare the effects of market volatilities on Hunya Foods and Ching Feng 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 Hunya Foods with a short position of Ching Feng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunya Foods and Ching Feng.
Diversification Opportunities for Hunya Foods and Ching Feng
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hunya and Ching is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hunya Foods Co and Ching Feng Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ching Feng Home and Hunya Foods 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 Hunya Foods Co are associated (or correlated) with Ching Feng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ching Feng Home has no effect on the direction of Hunya Foods i.e., Hunya Foods and Ching Feng go up and down completely randomly.
Pair Corralation between Hunya Foods and Ching Feng
Assuming the 90 days trading horizon Hunya Foods Co is expected to generate 0.79 times more return on investment than Ching Feng. However, Hunya Foods Co is 1.27 times less risky than Ching Feng. It trades about -0.01 of its potential returns per unit of risk. Ching Feng Home is currently generating about -0.06 per unit of risk. If you would invest 2,270 in Hunya Foods Co on October 24, 2024 and sell it today you would lose (5.00) from holding Hunya Foods Co or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunya Foods Co vs. Ching Feng Home
Performance |
| Timeline |
| Hunya Foods |
| Ching Feng Home |
Hunya Foods and Ching Feng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunya Foods and Ching Feng
The main advantage of trading using opposite Hunya Foods and Ching Feng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunya Foods position performs unexpectedly, Ching Feng 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 Ching Feng will offset losses from the drop in Ching Feng's long position.| Hunya Foods vs. AGV Products Corp | Hunya Foods vs. Taisun Enterprise Co | Hunya Foods vs. De Licacy Industrial | Hunya Foods vs. Wisher Industrial Co |
| Ching Feng vs. Globe Union Industrial | Ching Feng vs. Taiwan Fu Hsing | Ching Feng vs. Taiwan Hon Chuan | Ching Feng vs. Feng Tay Enterprises |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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