Correlation Between Chung Hsin and Mayer Steel
Can any of the company-specific risk be diversified away by investing in both Chung Hsin and Mayer Steel 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 Mayer Steel 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 Mayer Steel Pipe, you can compare the effects of market volatilities on Chung Hsin and Mayer Steel 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 Mayer Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Hsin and Mayer Steel.
Diversification Opportunities for Chung Hsin and Mayer Steel
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chung and Mayer is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Chung Hsin Electric Machinery and Mayer Steel Pipe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayer Steel Pipe 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 Mayer Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayer Steel Pipe has no effect on the direction of Chung Hsin i.e., Chung Hsin and Mayer Steel go up and down completely randomly.
Pair Corralation between Chung Hsin and Mayer Steel
Assuming the 90 days trading horizon Chung Hsin is expected to generate 28.66 times less return on investment than Mayer Steel. In addition to that, Chung Hsin is 1.36 times more volatile than Mayer Steel Pipe. It trades about 0.0 of its total potential returns per unit of risk. Mayer Steel Pipe is currently generating about 0.19 per unit of volatility. If you would invest 2,805 in Mayer Steel Pipe on November 30, 2024 and sell it today you would earn a total of 295.00 from holding Mayer Steel Pipe or generate 10.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Hsin Electric Machinery vs. Mayer Steel Pipe
Performance |
| Timeline |
| Chung Hsin Electric |
| Mayer Steel Pipe |
Chung Hsin and Mayer Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Hsin and Mayer Steel
The main advantage of trading using opposite Chung Hsin and Mayer Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Hsin position performs unexpectedly, Mayer Steel 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 Mayer Steel will offset losses from the drop in Mayer Steel'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 |
| Mayer Steel vs. Froch Enterprise Co | Mayer Steel vs. Hsin Kuang Steel | Mayer Steel vs. Chung Hung Steel | Mayer Steel vs. Tung Ho Steel |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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