Correlation Between Chung Fu and Pegatron Corp
Can any of the company-specific risk be diversified away by investing in both Chung Fu and Pegatron Corp 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 Pegatron Corp 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 Pegatron Corp, you can compare the effects of market volatilities on Chung Fu and Pegatron Corp 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 Pegatron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Fu and Pegatron Corp.
Diversification Opportunities for Chung Fu and Pegatron Corp
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chung and Pegatron is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Chung Fu Tex International and Pegatron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegatron Corp 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 Pegatron Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegatron Corp has no effect on the direction of Chung Fu i.e., Chung Fu and Pegatron Corp go up and down completely randomly.
Pair Corralation between Chung Fu and Pegatron Corp
Assuming the 90 days trading horizon Chung Fu Tex International is expected to under-perform the Pegatron Corp. In addition to that, Chung Fu is 1.63 times more volatile than Pegatron Corp. It trades about -0.19 of its total potential returns per unit of risk. Pegatron Corp is currently generating about -0.15 per unit of volatility. If you would invest 10,250 in Pegatron Corp on August 28, 2024 and sell it today you would lose (500.00) from holding Pegatron Corp or give up 4.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Chung Fu Tex International vs. Pegatron Corp
Performance |
| Timeline |
| Chung Fu Tex |
| Pegatron Corp |
Chung Fu and Pegatron Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Fu and Pegatron Corp
The main advantage of trading using opposite Chung Fu and Pegatron Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Fu position performs unexpectedly, Pegatron Corp 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 Pegatron Corp will offset losses from the drop in Pegatron Corp's long position.| Chung Fu vs. Chainqui Construction Development | Chung Fu vs. Zinwell | Chung Fu vs. Symtek Automation Asia | Chung Fu vs. CTCI Corp |
| Pegatron Corp vs. Wistron Corp | Pegatron Corp vs. Quanta Computer | Pegatron Corp vs. Compal Electronics | Pegatron Corp vs. Catcher Technology 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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