Correlation Between Chia Her and Merida Industry
Can any of the company-specific risk be diversified away by investing in both Chia Her and Merida Industry 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 Merida Industry 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 Merida Industry Co, you can compare the effects of market volatilities on Chia Her and Merida Industry 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 Merida Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Her and Merida Industry.
Diversification Opportunities for Chia Her and Merida Industry
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chia and Merida is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Chia Her Industrial and Merida Industry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merida Industry 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 Merida Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merida Industry has no effect on the direction of Chia Her i.e., Chia Her and Merida Industry go up and down completely randomly.
Pair Corralation between Chia Her and Merida Industry
Assuming the 90 days trading horizon Chia Her Industrial is expected to under-perform the Merida Industry. In addition to that, Chia Her is 3.28 times more volatile than Merida Industry Co. It trades about -0.09 of its total potential returns per unit of risk. Merida Industry Co is currently generating about -0.03 per unit of volatility. If you would invest 16,100 in Merida Industry Co on September 13, 2024 and sell it today you would lose (250.00) from holding Merida Industry Co or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chia Her Industrial vs. Merida Industry Co
Performance |
| Timeline |
| Chia Her Industrial |
| Merida Industry |
Chia Her and Merida Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Her and Merida Industry
The main advantage of trading using opposite Chia Her and Merida Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Her position performs unexpectedly, Merida Industry 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 Merida Industry will offset losses from the drop in Merida Industry'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 |
| Merida Industry vs. Giant Manufacturing Co | Merida Industry vs. Cheng Shin Rubber | Merida Industry vs. Feng Tay Enterprises | Merida Industry vs. President Chain Store |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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