Correlation Between Makalot Industrial and Chailease Holding
Can any of the company-specific risk be diversified away by investing in both Makalot Industrial and Chailease Holding 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 Makalot Industrial and Chailease Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Makalot Industrial Co and Chailease Holding Co, you can compare the effects of market volatilities on Makalot Industrial and Chailease Holding 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 Makalot Industrial with a short position of Chailease Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Makalot Industrial and Chailease Holding.
Diversification Opportunities for Makalot Industrial and Chailease Holding
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Makalot and Chailease is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Makalot Industrial Co and Chailease Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chailease Holding and Makalot Industrial 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 Makalot Industrial Co are associated (or correlated) with Chailease Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chailease Holding has no effect on the direction of Makalot Industrial i.e., Makalot Industrial and Chailease Holding go up and down completely randomly.
Pair Corralation between Makalot Industrial and Chailease Holding
Assuming the 90 days trading horizon Makalot Industrial Co is expected to generate 1.28 times more return on investment than Chailease Holding. However, Makalot Industrial is 1.28 times more volatile than Chailease Holding Co. It trades about -0.05 of its potential returns per unit of risk. Chailease Holding Co is currently generating about -0.43 per unit of risk. If you would invest 34,400 in Makalot Industrial Co on August 28, 2024 and sell it today you would lose (1,500) from holding Makalot Industrial Co or give up 4.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Makalot Industrial Co vs. Chailease Holding Co
Performance |
| Timeline |
| Makalot Industrial |
| Chailease Holding |
Makalot Industrial and Chailease Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Makalot Industrial and Chailease Holding
The main advantage of trading using opposite Makalot Industrial and Chailease Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Makalot Industrial position performs unexpectedly, Chailease Holding 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 Chailease Holding will offset losses from the drop in Chailease Holding's long position.| Makalot Industrial vs. Taiwan Semiconductor Manufacturing | Makalot Industrial vs. Hon Hai Precision | Makalot Industrial vs. MediaTek | Makalot Industrial vs. Chunghwa Telecom Co |
| Chailease Holding vs. Fubon Financial Holding | Chailease Holding vs. CTBC Financial Holding | Chailease Holding vs. Mega Financial Holding | Chailease Holding vs. Cathay Financial Holding |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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