Correlation Between Chung Fu and Amtran Technology
Can any of the company-specific risk be diversified away by investing in both Chung Fu and Amtran Technology 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 Amtran Technology 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 Amtran Technology Co, you can compare the effects of market volatilities on Chung Fu and Amtran Technology 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 Amtran Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Fu and Amtran Technology.
Diversification Opportunities for Chung Fu and Amtran Technology
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chung and Amtran is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chung Fu Tex International and Amtran Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtran Technology 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 Amtran Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtran Technology has no effect on the direction of Chung Fu i.e., Chung Fu and Amtran Technology go up and down completely randomly.
Pair Corralation between Chung Fu and Amtran Technology
Assuming the 90 days trading horizon Chung Fu Tex International is expected to under-perform the Amtran Technology. In addition to that, Chung Fu is 1.24 times more volatile than Amtran Technology Co. It trades about -0.16 of its total potential returns per unit of risk. Amtran Technology Co is currently generating about -0.15 per unit of volatility. If you would invest 2,135 in Amtran Technology Co on August 30, 2024 and sell it today you would lose (125.00) from holding Amtran Technology Co or give up 5.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Fu Tex International vs. Amtran Technology Co
Performance |
| Timeline |
| Chung Fu Tex |
| Amtran Technology |
Chung Fu and Amtran Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Fu and Amtran Technology
The main advantage of trading using opposite Chung Fu and Amtran Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Fu position performs unexpectedly, Amtran Technology 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 Amtran Technology will offset losses from the drop in Amtran Technology's long position.| Chung Fu vs. Maxigen Biotech | Chung Fu vs. United Radiant Technology | Chung Fu vs. Microelectronics Technology | Chung Fu vs. Sun Max Tech |
| Amtran Technology vs. Yulon Finance Corp | Amtran Technology vs. Taiwan Secom Co | Amtran Technology vs. Great Wall Enterprise |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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