Correlation Between Chung Fu and Pan International
Can any of the company-specific risk be diversified away by investing in both Chung Fu and Pan International 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 Pan International 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 Pan International Industrial Corp, you can compare the effects of market volatilities on Chung Fu and Pan International 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 Pan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Fu and Pan International.
Diversification Opportunities for Chung Fu and Pan International
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chung and Pan is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Chung Fu Tex International and Pan International Industrial C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan International 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 Pan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan International has no effect on the direction of Chung Fu i.e., Chung Fu and Pan International go up and down completely randomly.
Pair Corralation between Chung Fu and Pan International
Assuming the 90 days trading horizon Chung Fu Tex International is expected to generate 1.67 times more return on investment than Pan International. However, Chung Fu is 1.67 times more volatile than Pan International Industrial Corp. It trades about 0.01 of its potential returns per unit of risk. Pan International Industrial Corp is currently generating about 0.0 per unit of risk. If you would invest 4,420 in Chung Fu Tex International on August 27, 2024 and sell it today you would lose (215.00) from holding Chung Fu Tex International or give up 4.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
Chung Fu Tex International vs. Pan International Industrial C
Performance |
| Timeline |
| Chung Fu Tex |
| Pan International |
Chung Fu and Pan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Fu and Pan International
The main advantage of trading using opposite Chung Fu and Pan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Fu position performs unexpectedly, Pan International 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 Pan International will offset losses from the drop in Pan International's long position.| Chung Fu vs. Chainqui Construction Development | Chung Fu vs. Zinwell | Chung Fu vs. Symtek Automation Asia | Chung Fu vs. CTCI Corp |
| Pan International vs. Novatek Microelectronics Corp | Pan International vs. Quanta Computer | Pan International vs. United Microelectronics |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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