Correlation Between Chia Her and Paiho Shih
Can any of the company-specific risk be diversified away by investing in both Chia Her and Paiho Shih 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 Paiho Shih 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 Paiho Shih Holdings, you can compare the effects of market volatilities on Chia Her and Paiho Shih 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 Paiho Shih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Her and Paiho Shih.
Diversification Opportunities for Chia Her and Paiho Shih
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chia and Paiho is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Chia Her Industrial and Paiho Shih Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paiho Shih Holdings 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 Paiho Shih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paiho Shih Holdings has no effect on the direction of Chia Her i.e., Chia Her and Paiho Shih go up and down completely randomly.
Pair Corralation between Chia Her and Paiho Shih
Assuming the 90 days trading horizon Chia Her Industrial is expected to generate 1.59 times more return on investment than Paiho Shih. However, Chia Her is 1.59 times more volatile than Paiho Shih Holdings. It trades about 0.05 of its potential returns per unit of risk. Paiho Shih Holdings is currently generating about 0.02 per unit of risk. If you would invest 1,570 in Chia Her Industrial on September 5, 2024 and sell it today you would earn a total of 965.00 from holding Chia Her Industrial or generate 61.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Chia Her Industrial vs. Paiho Shih Holdings
Performance |
| Timeline |
| Chia Her Industrial |
| Paiho Shih Holdings |
Chia Her and Paiho Shih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Her and Paiho Shih
The main advantage of trading using opposite Chia Her and Paiho Shih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Her position performs unexpectedly, Paiho Shih 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 Paiho Shih will offset losses from the drop in Paiho Shih'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 |
| Paiho Shih vs. Taiwan Paiho | Paiho Shih vs. Feng Tay Enterprises | Paiho Shih vs. Fulgent Sun International | Paiho Shih vs. Taiwan Hon Chuan |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Commodity Directory Find actively traded commodities issued by global exchanges |