Correlation Between Chia Her and Nan Liu
Can any of the company-specific risk be diversified away by investing in both Chia Her and Nan Liu 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 Nan Liu 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 Nan Liu Enterprise, you can compare the effects of market volatilities on Chia Her and Nan Liu 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 Nan Liu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Her and Nan Liu.
Diversification Opportunities for Chia Her and Nan Liu
Very good diversification
The 3 months correlation between Chia and Nan is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Chia Her Industrial and Nan Liu Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Liu Enterprise 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 Nan Liu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Liu Enterprise has no effect on the direction of Chia Her i.e., Chia Her and Nan Liu go up and down completely randomly.
Pair Corralation between Chia Her and Nan Liu
Assuming the 90 days trading horizon Chia Her Industrial is expected to under-perform the Nan Liu. In addition to that, Chia Her is 4.61 times more volatile than Nan Liu Enterprise. It trades about -0.09 of its total potential returns per unit of risk. Nan Liu Enterprise is currently generating about -0.09 per unit of volatility. If you would invest 6,970 in Nan Liu Enterprise on September 13, 2024 and sell it today you would lose (190.00) from holding Nan Liu Enterprise or give up 2.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chia Her Industrial vs. Nan Liu Enterprise
Performance |
| Timeline |
| Chia Her Industrial |
| Nan Liu Enterprise |
Chia Her and Nan Liu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Her and Nan Liu
The main advantage of trading using opposite Chia Her and Nan Liu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Her position performs unexpectedly, Nan Liu 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 Nan Liu will offset losses from the drop in Nan Liu'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 |
| Nan Liu vs. Makalot Industrial Co | Nan Liu vs. President Chain Store | Nan Liu vs. Ruentex Development Co | Nan Liu vs. Eclat Textile 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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