Correlation Between Chung Fu and De Licacy
Can any of the company-specific risk be diversified away by investing in both Chung Fu and De Licacy 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 Chung Fu and De Licacy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chung Fu Tex International and De Licacy Industrial, you can compare the effects of market volatilities on Chung Fu and De Licacy 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 Chung Fu with a short position of De Licacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Fu and De Licacy.
Diversification Opportunities for Chung Fu and De Licacy
Very good diversification
The 3 months correlation between Chung and 1464 is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Chung Fu Tex International and De Licacy Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Licacy Industrial and Chung Fu 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 Chung Fu Tex International are associated (or correlated) with De Licacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Licacy Industrial has no effect on the direction of Chung Fu i.e., Chung Fu and De Licacy go up and down completely randomly.
Pair Corralation between Chung Fu and De Licacy
Assuming the 90 days trading horizon Chung Fu Tex International is expected to under-perform the De Licacy. In addition to that, Chung Fu is 1.02 times more volatile than De Licacy Industrial. It trades about -0.1 of its total potential returns per unit of risk. De Licacy Industrial is currently generating about -0.01 per unit of volatility. If you would invest 1,570 in De Licacy Industrial on August 24, 2024 and sell it today you would lose (25.00) from holding De Licacy Industrial or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chung Fu Tex International vs. De Licacy Industrial
Performance |
| Timeline |
| Chung Fu Tex |
| De Licacy Industrial |
Chung Fu and De Licacy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Fu and De Licacy
The main advantage of trading using opposite Chung Fu and De Licacy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Fu position performs unexpectedly, De Licacy 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 De Licacy will offset losses from the drop in De Licacy's long position.| Chung Fu vs. Integrated Service Technology | Chung Fu vs. Sunspring Metal Corp | Chung Fu vs. ADLINK Technology | Chung Fu vs. Simplo Technology Co |
| De Licacy vs. Taiwan Semiconductor Manufacturing | De Licacy vs. Hon Hai Precision | De Licacy vs. MediaTek | De Licacy vs. Chunghwa Telecom Co |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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