Correlation Between Zig Sheng and Chaintech Technology
Can any of the company-specific risk be diversified away by investing in both Zig Sheng and Chaintech Technology 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 Zig Sheng and Chaintech Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zig Sheng Industrial and Chaintech Technology Corp, you can compare the effects of market volatilities on Zig Sheng and Chaintech Technology 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 Zig Sheng with a short position of Chaintech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zig Sheng and Chaintech Technology.
Diversification Opportunities for Zig Sheng and Chaintech Technology
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zig and Chaintech is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Zig Sheng Industrial and Chaintech Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chaintech Technology Corp and Zig Sheng 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 Zig Sheng Industrial are associated (or correlated) with Chaintech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chaintech Technology Corp has no effect on the direction of Zig Sheng i.e., Zig Sheng and Chaintech Technology go up and down completely randomly.
Pair Corralation between Zig Sheng and Chaintech Technology
Assuming the 90 days trading horizon Zig Sheng Industrial is expected to generate 0.49 times more return on investment than Chaintech Technology. However, Zig Sheng Industrial is 2.03 times less risky than Chaintech Technology. It trades about -0.14 of its potential returns per unit of risk. Chaintech Technology Corp is currently generating about -0.3 per unit of risk. If you would invest 1,030 in Zig Sheng Industrial on September 3, 2024 and sell it today you would lose (30.00) from holding Zig Sheng Industrial or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zig Sheng Industrial vs. Chaintech Technology Corp
Performance |
| Timeline |
| Zig Sheng Industrial |
| Chaintech Technology Corp |
Zig Sheng and Chaintech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zig Sheng and Chaintech Technology
The main advantage of trading using opposite Zig Sheng and Chaintech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zig Sheng position performs unexpectedly, Chaintech Technology 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 Chaintech Technology will offset losses from the drop in Chaintech Technology's long position.| Zig Sheng vs. Lealea Enterprise Co | Zig Sheng vs. Tainan Spinning Co | Zig Sheng vs. Li Peng Enterprise | Zig Sheng vs. Shinkong Synthetic Fiber |
| Chaintech Technology vs. Taiwan Semiconductor Manufacturing | Chaintech Technology vs. Yang Ming Marine | Chaintech Technology vs. ASE Industrial Holding | Chaintech Technology vs. AU Optronics |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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