Correlation Between Chung Hsin and Strong H
Can any of the company-specific risk be diversified away by investing in both Chung Hsin and Strong H 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 Strong H 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 Strong H Machinery, you can compare the effects of market volatilities on Chung Hsin and Strong H 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 Strong H. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Hsin and Strong H.
Diversification Opportunities for Chung Hsin and Strong H
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chung and Strong is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Chung Hsin Electric Machinery and Strong H Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strong H Machinery 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 Strong H. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strong H Machinery has no effect on the direction of Chung Hsin i.e., Chung Hsin and Strong H go up and down completely randomly.
Pair Corralation between Chung Hsin and Strong H
Assuming the 90 days trading horizon Chung Hsin Electric Machinery is expected to generate 3.63 times more return on investment than Strong H. However, Chung Hsin is 3.63 times more volatile than Strong H Machinery. It trades about 0.08 of its potential returns per unit of risk. Strong H Machinery is currently generating about 0.0 per unit of risk. If you would invest 6,360 in Chung Hsin Electric Machinery on September 3, 2024 and sell it today you would earn a total of 9,440 from holding Chung Hsin Electric Machinery or generate 148.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Hsin Electric Machinery vs. Strong H Machinery
Performance |
| Timeline |
| Chung Hsin Electric |
| Strong H Machinery |
Chung Hsin and Strong H Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Hsin and Strong H
The main advantage of trading using opposite Chung Hsin and Strong H positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Hsin position performs unexpectedly, Strong H 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 Strong H will offset losses from the drop in Strong H's long position.| Chung Hsin vs. Universal Microelectronics Co | Chung Hsin vs. AVerMedia Technologies | Chung Hsin vs. Symtek Automation Asia | Chung Hsin vs. WiseChip Semiconductor |
| Strong H vs. San Shing Fastech | Strong H vs. QST International | Strong H vs. Intai Technology | Strong H 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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