Correlation Between USI Corp and Chia Hsin
Can any of the company-specific risk be diversified away by investing in both USI Corp and Chia Hsin 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 USI Corp and Chia Hsin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USI Corp and Chia Hsin Cement, you can compare the effects of market volatilities on USI Corp and Chia Hsin 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 USI Corp with a short position of Chia Hsin. Check out your portfolio center. Please also check ongoing floating volatility patterns of USI Corp and Chia Hsin.
Diversification Opportunities for USI Corp and Chia Hsin
Weak diversification
The 3 months correlation between USI and Chia is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding USI Corp and Chia Hsin Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chia Hsin Cement and USI Corp 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 USI Corp are associated (or correlated) with Chia Hsin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chia Hsin Cement has no effect on the direction of USI Corp i.e., USI Corp and Chia Hsin go up and down completely randomly.
Pair Corralation between USI Corp and Chia Hsin
Assuming the 90 days trading horizon USI Corp is expected to under-perform the Chia Hsin. In addition to that, USI Corp is 2.0 times more volatile than Chia Hsin Cement. It trades about -0.07 of its total potential returns per unit of risk. Chia Hsin Cement is currently generating about -0.02 per unit of volatility. If you would invest 1,865 in Chia Hsin Cement on September 1, 2024 and sell it today you would lose (70.00) from holding Chia Hsin Cement or give up 3.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
USI Corp vs. Chia Hsin Cement
Performance |
| Timeline |
| USI Corp |
| Chia Hsin Cement |
USI Corp and Chia Hsin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USI Corp and Chia Hsin
The main advantage of trading using opposite USI Corp and Chia Hsin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USI Corp position performs unexpectedly, Chia Hsin 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 Chia Hsin will offset losses from the drop in Chia Hsin's long position.| USI Corp vs. Basso Industry Corp | USI Corp vs. Chung Hsin Electric Machinery | USI Corp vs. TYC Brother Industrial | USI Corp vs. TECO Electric Machinery |
| Chia Hsin vs. Basso Industry Corp | Chia Hsin vs. Chung Hsin Electric Machinery | Chia Hsin vs. TYC Brother Industrial | Chia Hsin vs. TECO Electric Machinery |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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