Correlation Between I Hwa and Chaintech Technology
Can any of the company-specific risk be diversified away by investing in both I Hwa 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 I Hwa and Chaintech Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Hwa Industrial Co and Chaintech Technology Corp, you can compare the effects of market volatilities on I Hwa 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 I Hwa with a short position of Chaintech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Hwa and Chaintech Technology.
Diversification Opportunities for I Hwa and Chaintech Technology
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between 1456 and Chaintech is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding I Hwa Industrial Co 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 I Hwa 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 I Hwa Industrial Co 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 I Hwa i.e., I Hwa and Chaintech Technology go up and down completely randomly.
Pair Corralation between I Hwa and Chaintech Technology
Assuming the 90 days trading horizon I Hwa Industrial Co is expected to generate 1.0 times more return on investment than Chaintech Technology. However, I Hwa is 1.0 times more volatile than Chaintech Technology Corp. It trades about 0.0 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 1,780 in I Hwa Industrial Co on September 3, 2024 and sell it today you would lose (10.00) from holding I Hwa Industrial Co or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
I Hwa Industrial Co vs. Chaintech Technology Corp
Performance |
| Timeline |
| I Hwa Industrial |
| Chaintech Technology Corp |
I Hwa and Chaintech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I Hwa and Chaintech Technology
The main advantage of trading using opposite I Hwa and Chaintech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Hwa 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.| I Hwa vs. Tainan Spinning Co | I Hwa vs. Chia Her Industrial | I Hwa vs. WiseChip Semiconductor | I Hwa vs. Novatek Microelectronics Corp |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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