Correlation Between USI Corp and CHC Resources
Can any of the company-specific risk be diversified away by investing in both USI Corp and CHC Resources 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 CHC Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USI Corp and CHC Resources Corp, you can compare the effects of market volatilities on USI Corp and CHC Resources 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 CHC Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of USI Corp and CHC Resources.
Diversification Opportunities for USI Corp and CHC Resources
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between USI and CHC is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding USI Corp and CHC Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHC Resources Corp 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 CHC Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHC Resources Corp has no effect on the direction of USI Corp i.e., USI Corp and CHC Resources go up and down completely randomly.
Pair Corralation between USI Corp and CHC Resources
Assuming the 90 days trading horizon USI Corp is expected to under-perform the CHC Resources. In addition to that, USI Corp is 2.72 times more volatile than CHC Resources Corp. It trades about -0.24 of its total potential returns per unit of risk. CHC Resources Corp is currently generating about -0.13 per unit of volatility. If you would invest 6,770 in CHC Resources Corp on September 1, 2024 and sell it today you would lose (120.00) from holding CHC Resources Corp or give up 1.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USI Corp vs. CHC Resources Corp
Performance |
| Timeline |
| USI Corp |
| CHC Resources Corp |
USI Corp and CHC Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USI Corp and CHC Resources
The main advantage of trading using opposite USI Corp and CHC Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USI Corp position performs unexpectedly, CHC Resources 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 CHC Resources will offset losses from the drop in CHC Resources' 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 |
| CHC Resources vs. China Steel Chemical | CHC Resources vs. Taiwan Secom Co | CHC Resources vs. Nak Sealing Technologies | CHC Resources vs. Sinyi Realty |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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