Correlation Between Chyang Sheng and Hong Yi
Can any of the company-specific risk be diversified away by investing in both Chyang Sheng and Hong Yi 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 Chyang Sheng and Hong Yi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chyang Sheng Dyeing and Hong Yi Fiber, you can compare the effects of market volatilities on Chyang Sheng and Hong Yi 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 Chyang Sheng with a short position of Hong Yi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chyang Sheng and Hong Yi.
Diversification Opportunities for Chyang Sheng and Hong Yi
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chyang and Hong is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Chyang Sheng Dyeing and Hong Yi Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Yi Fiber and Chyang 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 Chyang Sheng Dyeing are associated (or correlated) with Hong Yi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Yi Fiber has no effect on the direction of Chyang Sheng i.e., Chyang Sheng and Hong Yi go up and down completely randomly.
Pair Corralation between Chyang Sheng and Hong Yi
Assuming the 90 days trading horizon Chyang Sheng Dyeing is expected to generate 1.16 times more return on investment than Hong Yi. However, Chyang Sheng is 1.16 times more volatile than Hong Yi Fiber. It trades about 0.08 of its potential returns per unit of risk. Hong Yi Fiber is currently generating about -0.13 per unit of risk. 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 |
Chyang Sheng Dyeing vs. Hong Yi Fiber
Performance |
| Timeline |
| Chyang Sheng Dyeing |
| Hong Yi Fiber |
Chyang Sheng and Hong Yi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chyang Sheng and Hong Yi
The main advantage of trading using opposite Chyang Sheng and Hong Yi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chyang Sheng position performs unexpectedly, Hong Yi 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 Hong Yi will offset losses from the drop in Hong Yi's long position.| Chyang Sheng vs. Chaintech Technology Corp | Chyang Sheng vs. Avision | Chyang Sheng vs. Clevo Co | Chyang Sheng vs. Elitegroup Computer Systems |
| Hong Yi vs. Yi Jinn Industrial | Hong Yi vs. Zig Sheng Industrial | Hong Yi vs. Lan Fa Textile | Hong Yi vs. Tainan Spinning Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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