Correlation Between Chia Her and Aiptek International
Can any of the company-specific risk be diversified away by investing in both Chia Her and Aiptek 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 Aiptek 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 Aiptek International, you can compare the effects of market volatilities on Chia Her and Aiptek 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 Aiptek International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Her and Aiptek International.
Diversification Opportunities for Chia Her and Aiptek International
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chia and Aiptek is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Chia Her Industrial and Aiptek International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aiptek 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 Aiptek International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aiptek International has no effect on the direction of Chia Her i.e., Chia Her and Aiptek International go up and down completely randomly.
Pair Corralation between Chia Her and Aiptek International
Assuming the 90 days trading horizon Chia Her Industrial is expected to generate 2.14 times more return on investment than Aiptek International. However, Chia Her is 2.14 times more volatile than Aiptek International. It trades about 0.13 of its potential returns per unit of risk. Aiptek International is currently generating about 0.01 per unit of risk. If you would invest 2,260 in Chia Her Industrial on September 5, 2024 and sell it today you would earn a total of 275.00 from holding Chia Her Industrial or generate 12.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chia Her Industrial vs. Aiptek International
Performance |
| Timeline |
| Chia Her Industrial |
| Aiptek International |
Chia Her and Aiptek International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Her and Aiptek International
The main advantage of trading using opposite Chia Her and Aiptek International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Her position performs unexpectedly, Aiptek 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 Aiptek International will offset losses from the drop in Aiptek 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 |
| Aiptek International vs. Tainan Spinning Co | Aiptek International vs. Chia Her Industrial | Aiptek International vs. WiseChip Semiconductor | Aiptek 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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