Correlation Between Hong Yi and Chyang Sheng
Can any of the company-specific risk be diversified away by investing in both Hong Yi and Chyang Sheng 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 Hong Yi and Chyang Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Yi Fiber and Chyang Sheng Dyeing, you can compare the effects of market volatilities on Hong Yi and Chyang Sheng 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 Hong Yi with a short position of Chyang Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Yi and Chyang Sheng.
Diversification Opportunities for Hong Yi and Chyang Sheng
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hong and Chyang is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hong Yi Fiber and Chyang Sheng Dyeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chyang Sheng Dyeing and Hong Yi 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 Hong Yi Fiber are associated (or correlated) with Chyang Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chyang Sheng Dyeing has no effect on the direction of Hong Yi i.e., Hong Yi and Chyang Sheng go up and down completely randomly.
Pair Corralation between Hong Yi and Chyang Sheng
Assuming the 90 days trading horizon Hong Yi Fiber is expected to under-perform the Chyang Sheng. But the stock apears to be less risky and, when comparing its historical volatility, Hong Yi Fiber is 1.16 times less risky than Chyang Sheng. The stock trades about -0.13 of its potential returns per unit of risk. The Chyang Sheng Dyeing is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,445 in Chyang Sheng Dyeing on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Chyang Sheng Dyeing or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hong Yi Fiber vs. Chyang Sheng Dyeing
Performance |
| Timeline |
| Hong Yi Fiber |
| Chyang Sheng Dyeing |
Hong Yi and Chyang Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Yi and Chyang Sheng
The main advantage of trading using opposite Hong Yi and Chyang Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Yi position performs unexpectedly, Chyang Sheng 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 Chyang Sheng will offset losses from the drop in Chyang Sheng's long position.| Hong Yi vs. Yi Jinn Industrial | Hong Yi vs. Zig Sheng Industrial | Hong Yi vs. Lan Fa Textile | Hong Yi vs. Tainan Spinning Co |
| Chyang Sheng vs. Chaintech Technology Corp | Chyang Sheng vs. Avision | Chyang Sheng vs. Clevo Co | Chyang Sheng vs. Elitegroup Computer Systems |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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