Correlation Between Chia Her and Chateau International
Can any of the company-specific risk be diversified away by investing in both Chia Her and Chateau 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 Chia Her and Chateau International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia Her Industrial and Chateau International Development, you can compare the effects of market volatilities on Chia Her and Chateau 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 Chia Her with a short position of Chateau International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Her and Chateau International.
Diversification Opportunities for Chia Her and Chateau International
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chia and Chateau is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Chia Her Industrial and Chateau International Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chateau International and Chia Her 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 Chia Her Industrial are associated (or correlated) with Chateau International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chateau International has no effect on the direction of Chia Her i.e., Chia Her and Chateau International go up and down completely randomly.
Pair Corralation between Chia Her and Chateau International
Assuming the 90 days trading horizon Chia Her Industrial is expected to generate 1.3 times more return on investment than Chateau International. However, Chia Her is 1.3 times more volatile than Chateau International Development. It trades about 0.08 of its potential returns per unit of risk. Chateau International Development is currently generating about -0.16 per unit of risk. If you would invest 1,755 in Chia Her Industrial on September 3, 2024 and sell it today you would earn a total of 620.00 from holding Chia Her Industrial or generate 35.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chia Her Industrial vs. Chateau International Developm
Performance |
| Timeline |
| Chia Her Industrial |
| Chateau International |
Chia Her and Chateau International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Her and Chateau International
The main advantage of trading using opposite Chia Her and Chateau International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Her position performs unexpectedly, Chateau 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 Chateau International will offset losses from the drop in Chateau International's long position.| Chia Her vs. Carnival Industrial Corp | Chia Her vs. I Hwa Industrial Co | Chia Her vs. Hung Chou Fiber | Chia Her vs. Tung Ho Textile |
| Chateau International vs. Tainan Spinning Co | Chateau International vs. Chia Her Industrial | Chateau International vs. WiseChip Semiconductor | Chateau International vs. Novatek Microelectronics Corp |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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