Correlation Between Chia Her and FineTek
Can any of the company-specific risk be diversified away by investing in both Chia Her and FineTek 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 FineTek 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 FineTek Co, you can compare the effects of market volatilities on Chia Her and FineTek 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 FineTek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Her and FineTek.
Diversification Opportunities for Chia Her and FineTek
Pay attention - limited upside
The 3 months correlation between Chia and FineTek is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Chia Her Industrial and FineTek Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FineTek 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 FineTek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FineTek has no effect on the direction of Chia Her i.e., Chia Her and FineTek go up and down completely randomly.
Pair Corralation between Chia Her and FineTek
Assuming the 90 days trading horizon Chia Her is expected to generate 1.42 times less return on investment than FineTek. In addition to that, Chia Her is 1.09 times more volatile than FineTek Co. It trades about 0.03 of its total potential returns per unit of risk. FineTek Co is currently generating about 0.05 per unit of volatility. If you would invest 9,755 in FineTek Co on September 4, 2024 and sell it today you would earn a total of 4,295 from holding FineTek Co or generate 44.03% 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. FineTek Co
Performance |
| Timeline |
| Chia Her Industrial |
| FineTek |
Chia Her and FineTek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Her and FineTek
The main advantage of trading using opposite Chia Her and FineTek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Her position performs unexpectedly, FineTek 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 FineTek will offset losses from the drop in FineTek'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 |
| FineTek vs. Integrated Service Technology | FineTek vs. WiseChip Semiconductor | FineTek vs. Novatek Microelectronics Corp | FineTek 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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