Correlation Between Chung Hsin and Anderson Industrial
Can any of the company-specific risk be diversified away by investing in both Chung Hsin and Anderson Industrial 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 Chung Hsin and Anderson Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chung Hsin Electric Machinery and Anderson Industrial Corp, you can compare the effects of market volatilities on Chung Hsin and Anderson Industrial 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 Chung Hsin with a short position of Anderson Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Hsin and Anderson Industrial.
Diversification Opportunities for Chung Hsin and Anderson Industrial
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chung and Anderson is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Chung Hsin Electric Machinery and Anderson Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anderson Industrial Corp and Chung Hsin 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 Chung Hsin Electric Machinery are associated (or correlated) with Anderson Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anderson Industrial Corp has no effect on the direction of Chung Hsin i.e., Chung Hsin and Anderson Industrial go up and down completely randomly.
Pair Corralation between Chung Hsin and Anderson Industrial
Assuming the 90 days trading horizon Chung Hsin Electric Machinery is expected to generate 0.74 times more return on investment than Anderson Industrial. However, Chung Hsin Electric Machinery is 1.35 times less risky than Anderson Industrial. It trades about -0.04 of its potential returns per unit of risk. Anderson Industrial Corp is currently generating about -0.25 per unit of risk. If you would invest 16,050 in Chung Hsin Electric Machinery on September 4, 2024 and sell it today you would lose (300.00) from holding Chung Hsin Electric Machinery or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Hsin Electric Machinery vs. Anderson Industrial Corp
Performance |
| Timeline |
| Chung Hsin Electric |
| Anderson Industrial Corp |
Chung Hsin and Anderson Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Hsin and Anderson Industrial
The main advantage of trading using opposite Chung Hsin and Anderson Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Hsin position performs unexpectedly, Anderson Industrial 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 Anderson Industrial will offset losses from the drop in Anderson Industrial's long position.| Chung Hsin vs. TECO Electric Machinery | Chung Hsin vs. Fortune Electric Co | Chung Hsin vs. Taiwan Cement Corp | Chung Hsin vs. Walsin Lihwa Corp |
| Anderson Industrial vs. Universal Microelectronics Co | Anderson Industrial vs. AVerMedia Technologies | Anderson Industrial vs. Symtek Automation Asia | Anderson Industrial vs. WiseChip Semiconductor |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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