Correlation Between Chia Her and New Palace
Can any of the company-specific risk be diversified away by investing in both Chia Her and New Palace 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 New Palace 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 New Palace International, you can compare the effects of market volatilities on Chia Her and New Palace 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 New Palace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Her and New Palace.
Diversification Opportunities for Chia Her and New Palace
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chia and New is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Chia Her Industrial and New Palace International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Palace 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 New Palace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Palace International has no effect on the direction of Chia Her i.e., Chia Her and New Palace go up and down completely randomly.
Pair Corralation between Chia Her and New Palace
Assuming the 90 days trading horizon Chia Her Industrial is expected to generate 3.02 times more return on investment than New Palace. However, Chia Her is 3.02 times more volatile than New Palace International. It trades about 0.12 of its potential returns per unit of risk. New Palace International is currently generating about 0.16 per unit of risk. If you would invest 1,835 in Chia Her Industrial on September 12, 2024 and sell it today you would earn a total of 530.00 from holding Chia Her Industrial or generate 28.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chia Her Industrial vs. New Palace International
Performance |
| Timeline |
| Chia Her Industrial |
| New Palace International |
Chia Her and New Palace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Her and New Palace
The main advantage of trading using opposite Chia Her and New Palace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Her position performs unexpectedly, New Palace 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 New Palace will offset losses from the drop in New Palace'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 |
| New Palace vs. Shui Mu International Co | New Palace vs. First Hotel Co | New Palace vs. Jinli Group Holdings | New Palace vs. Kingcan Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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