Correlation Between De Licacy and Chain Chon
Can any of the company-specific risk be diversified away by investing in both De Licacy and Chain Chon 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 De Licacy and Chain Chon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Licacy Industrial and Chain Chon Industrial, you can compare the effects of market volatilities on De Licacy and Chain Chon 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 De Licacy with a short position of Chain Chon. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Licacy and Chain Chon.
Diversification Opportunities for De Licacy and Chain Chon
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 1464 and Chain is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding De Licacy Industrial and Chain Chon Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chain Chon Industrial and De Licacy 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 De Licacy Industrial are associated (or correlated) with Chain Chon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chain Chon Industrial has no effect on the direction of De Licacy i.e., De Licacy and Chain Chon go up and down completely randomly.
Pair Corralation between De Licacy and Chain Chon
Assuming the 90 days trading horizon De Licacy Industrial is expected to generate 0.95 times more return on investment than Chain Chon. However, De Licacy Industrial is 1.05 times less risky than Chain Chon. It trades about 0.14 of its potential returns per unit of risk. Chain Chon Industrial is currently generating about 0.01 per unit of risk. If you would invest 1,340 in De Licacy Industrial on November 28, 2024 and sell it today you would earn a total of 525.00 from holding De Licacy Industrial or generate 39.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.16% |
| Values | Daily Returns |
De Licacy Industrial vs. Chain Chon Industrial
Performance |
| Timeline |
| De Licacy Industrial |
| Chain Chon Industrial |
De Licacy and Chain Chon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Licacy and Chain Chon
The main advantage of trading using opposite De Licacy and Chain Chon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Licacy position performs unexpectedly, Chain Chon 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 Chain Chon will offset losses from the drop in Chain Chon's long position.| De Licacy vs. Tainan Enterprises Co | De Licacy vs. Nien Hsing Textile | De Licacy vs. Wisher Industrial Co | De Licacy vs. Tex Ray Industrial Co |
| Chain Chon vs. Jetwell Computer Co | Chain Chon vs. I Jang Industrial | Chain Chon vs. Syscom Computer Engineering | Chain Chon vs. Kworld Computer 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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