Correlation Between Chung Fu and Chainqui Construction
Can any of the company-specific risk be diversified away by investing in both Chung Fu and Chainqui Construction 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 Chainqui Construction 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 Chainqui Construction Development, you can compare the effects of market volatilities on Chung Fu and Chainqui Construction 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 Chainqui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Fu and Chainqui Construction.
Diversification Opportunities for Chung Fu and Chainqui Construction
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chung and Chainqui is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Chung Fu Tex International and Chainqui Construction Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chainqui Construction 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 Chainqui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chainqui Construction has no effect on the direction of Chung Fu i.e., Chung Fu and Chainqui Construction go up and down completely randomly.
Pair Corralation between Chung Fu and Chainqui Construction
Assuming the 90 days trading horizon Chung Fu Tex International is expected to under-perform the Chainqui Construction. In addition to that, Chung Fu is 1.11 times more volatile than Chainqui Construction Development. It trades about -0.22 of its total potential returns per unit of risk. Chainqui Construction Development is currently generating about -0.12 per unit of volatility. If you would invest 1,830 in Chainqui Construction Development on August 31, 2024 and sell it today you would lose (110.00) from holding Chainqui Construction Development or give up 6.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Fu Tex International vs. Chainqui Construction Developm
Performance |
| Timeline |
| Chung Fu Tex |
| Chainqui Construction |
Chung Fu and Chainqui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Fu and Chainqui Construction
The main advantage of trading using opposite Chung Fu and Chainqui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Fu position performs unexpectedly, Chainqui Construction 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 Chainqui Construction will offset losses from the drop in Chainqui Construction's long position.| Chung Fu vs. Chung Hung Steel | Chung Fu vs. Voltronic Power Technology | Chung Fu vs. Iron Force Industrial | Chung Fu vs. Chicony Power Technology |
| Chainqui Construction vs. Hung Sheng Construction | Chainqui Construction vs. Kee Tai Properties | Chainqui Construction vs. BES Engineering Co | Chainqui Construction vs. Zinwell |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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