Correlation Between Chia Her and Leader Electronics
Can any of the company-specific risk be diversified away by investing in both Chia Her and Leader Electronics 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 Leader Electronics 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 Leader Electronics, you can compare the effects of market volatilities on Chia Her and Leader Electronics 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 Leader Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Her and Leader Electronics.
Diversification Opportunities for Chia Her and Leader Electronics
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chia and Leader is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Chia Her Industrial and Leader Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leader Electronics 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 Leader Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leader Electronics has no effect on the direction of Chia Her i.e., Chia Her and Leader Electronics go up and down completely randomly.
Pair Corralation between Chia Her and Leader Electronics
Assuming the 90 days trading horizon Chia Her is expected to generate 1.11 times less return on investment than Leader Electronics. In addition to that, Chia Her is 1.02 times more volatile than Leader Electronics. It trades about 0.04 of its total potential returns per unit of risk. Leader Electronics is currently generating about 0.05 per unit of volatility. If you would invest 1,010 in Leader Electronics on September 3, 2024 and sell it today you would earn a total of 620.00 from holding Leader Electronics or generate 61.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chia Her Industrial vs. Leader Electronics
Performance |
| Timeline |
| Chia Her Industrial |
| Leader Electronics |
Chia Her and Leader Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Her and Leader Electronics
The main advantage of trading using opposite Chia Her and Leader Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Her position performs unexpectedly, Leader Electronics 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 Leader Electronics will offset losses from the drop in Leader Electronics' 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 |
| Leader Electronics vs. Universal Microelectronics Co | Leader Electronics vs. AVerMedia Technologies | Leader Electronics vs. Symtek Automation Asia | Leader Electronics vs. WiseChip Semiconductor |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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