Correlation Between Hi Lai and Chinese Gamer
Can any of the company-specific risk be diversified away by investing in both Hi Lai and Chinese Gamer 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 Hi Lai and Chinese Gamer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hi Lai Foods Co and Chinese Gamer International, you can compare the effects of market volatilities on Hi Lai and Chinese Gamer 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 Hi Lai with a short position of Chinese Gamer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hi Lai and Chinese Gamer.
Diversification Opportunities for Hi Lai and Chinese Gamer
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 1268 and Chinese is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hi Lai Foods Co and Chinese Gamer International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinese Gamer Intern and Hi Lai 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 Hi Lai Foods Co are associated (or correlated) with Chinese Gamer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinese Gamer Intern has no effect on the direction of Hi Lai i.e., Hi Lai and Chinese Gamer go up and down completely randomly.
Pair Corralation between Hi Lai and Chinese Gamer
Assuming the 90 days trading horizon Hi Lai Foods Co is expected to generate 0.78 times more return on investment than Chinese Gamer. However, Hi Lai Foods Co is 1.28 times less risky than Chinese Gamer. It trades about 0.08 of its potential returns per unit of risk. Chinese Gamer International is currently generating about -0.04 per unit of risk. If you would invest 15,000 in Hi Lai Foods Co on October 24, 2024 and sell it today you would earn a total of 200.00 from holding Hi Lai Foods Co or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hi Lai Foods Co vs. Chinese Gamer International
Performance |
| Timeline |
| Hi Lai Foods |
| Chinese Gamer Intern |
Hi Lai and Chinese Gamer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hi Lai and Chinese Gamer
The main advantage of trading using opposite Hi Lai and Chinese Gamer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hi Lai position performs unexpectedly, Chinese Gamer 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 Chinese Gamer will offset losses from the drop in Chinese Gamer's long position.| Hi Lai vs. Chi Hua Fitness | Hi Lai vs. Elite Semiconductor Memory | Hi Lai vs. Onyx Healthcare | Hi Lai vs. Chung Lien Transportation |
| Chinese Gamer vs. Yuanta Financial Holdings | Chinese Gamer vs. Shinkong Insurance Co | Chinese Gamer vs. Louisa Professional Coffee | Chinese Gamer vs. TWOWAY Communications |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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