Correlation Between Chung Hsin and Chien Shing
Can any of the company-specific risk be diversified away by investing in both Chung Hsin and Chien Shing 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 Chien Shing 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 Chien Shing Stainless, you can compare the effects of market volatilities on Chung Hsin and Chien Shing 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 Chien Shing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Hsin and Chien Shing.
Diversification Opportunities for Chung Hsin and Chien Shing
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chung and Chien is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Chung Hsin Electric Machinery and Chien Shing Stainless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chien Shing Stainless 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 Chien Shing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chien Shing Stainless has no effect on the direction of Chung Hsin i.e., Chung Hsin and Chien Shing go up and down completely randomly.
Pair Corralation between Chung Hsin and Chien Shing
Assuming the 90 days trading horizon Chung Hsin is expected to generate 1.66 times less return on investment than Chien Shing. In addition to that, Chung Hsin is 1.02 times more volatile than Chien Shing Stainless. It trades about 0.04 of its total potential returns per unit of risk. Chien Shing Stainless is currently generating about 0.08 per unit of volatility. If you would invest 570.00 in Chien Shing Stainless on September 1, 2024 and sell it today you would earn a total of 515.00 from holding Chien Shing Stainless or generate 90.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Chung Hsin Electric Machinery vs. Chien Shing Stainless
Performance |
| Timeline |
| Chung Hsin Electric |
| Chien Shing Stainless |
Chung Hsin and Chien Shing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Hsin and Chien Shing
The main advantage of trading using opposite Chung Hsin and Chien Shing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Hsin position performs unexpectedly, Chien Shing 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 Chien Shing will offset losses from the drop in Chien Shing'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 |
| Chien Shing vs. Chung Hung Steel | Chien Shing vs. Chun Yuan Steel | Chien Shing vs. Hsin Kuang Steel | Chien Shing vs. First Copper Technology |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |