Correlation Between Chung Fu and STL Technology
Can any of the company-specific risk be diversified away by investing in both Chung Fu and STL 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 STL 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 STL Technology Co, you can compare the effects of market volatilities on Chung Fu and STL 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 STL Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Fu and STL Technology.
Diversification Opportunities for Chung Fu and STL Technology
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chung and STL is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Chung Fu Tex International and STL Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STL 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 STL Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STL Technology has no effect on the direction of Chung Fu i.e., Chung Fu and STL Technology go up and down completely randomly.
Pair Corralation between Chung Fu and STL Technology
Assuming the 90 days trading horizon Chung Fu is expected to generate 2.69 times less return on investment than STL Technology. In addition to that, Chung Fu is 1.21 times more volatile than STL Technology Co. It trades about 0.01 of its total potential returns per unit of risk. STL Technology Co is currently generating about 0.03 per unit of volatility. If you would invest 4,760 in STL Technology Co on September 3, 2024 and sell it today you would earn a total of 1,290 from holding STL Technology Co or generate 27.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Fu Tex International vs. STL Technology Co
Performance |
| Timeline |
| Chung Fu Tex |
| STL Technology |
Chung Fu and STL Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Fu and STL Technology
The main advantage of trading using opposite Chung Fu and STL Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Fu position performs unexpectedly, STL 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 STL Technology will offset losses from the drop in STL Technology's long position.| Chung Fu vs. Shinkong Insurance Co | Chung Fu vs. PChome Online | Chung Fu vs. Mercuries Life Insurance | Chung Fu vs. Union Bank of |
| STL Technology vs. Eclat Textile Co | STL Technology vs. WiseChip Semiconductor | STL Technology vs. Novatek Microelectronics Corp | STL Technology vs. Leader Electronics |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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