Correlation Between Chung Hsin and Yieh Phui
Can any of the company-specific risk be diversified away by investing in both Chung Hsin and Yieh Phui 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 Yieh Phui 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 Yieh Phui Enterprise, you can compare the effects of market volatilities on Chung Hsin and Yieh Phui 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 Yieh Phui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Hsin and Yieh Phui.
Diversification Opportunities for Chung Hsin and Yieh Phui
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chung and Yieh is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Chung Hsin Electric Machinery and Yieh Phui Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yieh Phui Enterprise 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 Yieh Phui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yieh Phui Enterprise has no effect on the direction of Chung Hsin i.e., Chung Hsin and Yieh Phui go up and down completely randomly.
Pair Corralation between Chung Hsin and Yieh Phui
Assuming the 90 days trading horizon Chung Hsin Electric Machinery is expected to under-perform the Yieh Phui. In addition to that, Chung Hsin is 2.68 times more volatile than Yieh Phui Enterprise. It trades about -0.01 of its total potential returns per unit of risk. Yieh Phui Enterprise is currently generating about 0.02 per unit of volatility. If you would invest 1,515 in Yieh Phui Enterprise on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Yieh Phui Enterprise or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chung Hsin Electric Machinery vs. Yieh Phui Enterprise
Performance |
| Timeline |
| Chung Hsin Electric |
| Yieh Phui Enterprise |
Chung Hsin and Yieh Phui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Hsin and Yieh Phui
The main advantage of trading using opposite Chung Hsin and Yieh Phui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Hsin position performs unexpectedly, Yieh Phui 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 Yieh Phui will offset losses from the drop in Yieh Phui'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 |
| Yieh Phui vs. Basso Industry Corp | Yieh Phui vs. Chung Hsin Electric Machinery | Yieh Phui vs. TYC Brother Industrial | Yieh Phui vs. TECO Electric Machinery |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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