Correlation Between Chia Her and Holiday Entertainment
Can any of the company-specific risk be diversified away by investing in both Chia Her and Holiday Entertainment 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 Holiday Entertainment 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 Holiday Entertainment Co, you can compare the effects of market volatilities on Chia Her and Holiday Entertainment 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 Holiday Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Her and Holiday Entertainment.
Diversification Opportunities for Chia Her and Holiday Entertainment
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chia and Holiday is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Chia Her Industrial and Holiday Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holiday Entertainment 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 Holiday Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holiday Entertainment has no effect on the direction of Chia Her i.e., Chia Her and Holiday Entertainment go up and down completely randomly.
Pair Corralation between Chia Her and Holiday Entertainment
Assuming the 90 days trading horizon Chia Her Industrial is expected to generate 2.28 times more return on investment than Holiday Entertainment. However, Chia Her is 2.28 times more volatile than Holiday Entertainment Co. It trades about 0.04 of its potential returns per unit of risk. Holiday Entertainment Co is currently generating about 0.04 per unit of risk. If you would invest 1,595 in Chia Her Industrial on September 3, 2024 and sell it today you would earn a total of 780.00 from holding Chia Her Industrial or generate 48.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chia Her Industrial vs. Holiday Entertainment Co
Performance |
| Timeline |
| Chia Her Industrial |
| Holiday Entertainment |
Chia Her and Holiday Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Her and Holiday Entertainment
The main advantage of trading using opposite Chia Her and Holiday Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Her position performs unexpectedly, Holiday Entertainment 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 Holiday Entertainment will offset losses from the drop in Holiday Entertainment'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 |
| Holiday Entertainment vs. Tainan Spinning Co | Holiday Entertainment vs. Chia Her Industrial | Holiday Entertainment vs. WiseChip Semiconductor | Holiday Entertainment 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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