Correlation Between Chung Hsin and Airtac International
Can any of the company-specific risk be diversified away by investing in both Chung Hsin and Airtac International 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 Airtac International 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 Airtac International Group, you can compare the effects of market volatilities on Chung Hsin and Airtac International 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 Airtac International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Hsin and Airtac International.
Diversification Opportunities for Chung Hsin and Airtac International
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chung and Airtac is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Chung Hsin Electric Machinery and Airtac International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airtac International 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 Airtac International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airtac International has no effect on the direction of Chung Hsin i.e., Chung Hsin and Airtac International go up and down completely randomly.
Pair Corralation between Chung Hsin and Airtac International
Assuming the 90 days trading horizon Chung Hsin Electric Machinery is expected to generate 1.24 times more return on investment than Airtac International. However, Chung Hsin is 1.24 times more volatile than Airtac International Group. It trades about 0.07 of its potential returns per unit of risk. Airtac International Group is currently generating about -0.01 per unit of risk. If you would invest 7,320 in Chung Hsin Electric Machinery on August 31, 2024 and sell it today you would earn a total of 8,480 from holding Chung Hsin Electric Machinery or generate 115.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Hsin Electric Machinery vs. Airtac International Group
Performance |
| Timeline |
| Chung Hsin Electric |
| Airtac International |
Chung Hsin and Airtac International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Hsin and Airtac International
The main advantage of trading using opposite Chung Hsin and Airtac International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Hsin position performs unexpectedly, Airtac International 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 Airtac International will offset losses from the drop in Airtac International's long position.| Chung Hsin vs. BES Engineering Co | Chung Hsin vs. Continental Holdings Corp | Chung Hsin vs. Kee Tai Properties | Chung Hsin vs. Hung Sheng Construction |
| Airtac International vs. BES Engineering Co | Airtac International vs. Continental Holdings Corp | Airtac International vs. Kee Tai Properties | Airtac International vs. Hung Sheng Construction |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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