Correlation Between Chung Hsin and Fulgent Sun
Can any of the company-specific risk be diversified away by investing in both Chung Hsin and Fulgent Sun 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 Fulgent Sun 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 Fulgent Sun International, you can compare the effects of market volatilities on Chung Hsin and Fulgent Sun 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 Fulgent Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Hsin and Fulgent Sun.
Diversification Opportunities for Chung Hsin and Fulgent Sun
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chung and Fulgent is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Chung Hsin Electric Machinery and Fulgent Sun International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulgent Sun 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 Fulgent Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulgent Sun International has no effect on the direction of Chung Hsin i.e., Chung Hsin and Fulgent Sun go up and down completely randomly.
Pair Corralation between Chung Hsin and Fulgent Sun
Assuming the 90 days trading horizon Chung Hsin Electric Machinery is expected to under-perform the Fulgent Sun. In addition to that, Chung Hsin is 1.02 times more volatile than Fulgent Sun International. It trades about -0.01 of its total potential returns per unit of risk. Fulgent Sun International is currently generating about 0.12 per unit of volatility. If you would invest 10,700 in Fulgent Sun International on September 1, 2024 and sell it today you would earn a total of 500.00 from holding Fulgent Sun International or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Hsin Electric Machinery vs. Fulgent Sun International
Performance |
| Timeline |
| Chung Hsin Electric |
| Fulgent Sun International |
Chung Hsin and Fulgent Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Hsin and Fulgent Sun
The main advantage of trading using opposite Chung Hsin and Fulgent Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Hsin position performs unexpectedly, Fulgent Sun 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 Fulgent Sun will offset losses from the drop in Fulgent Sun'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 |
| Fulgent Sun vs. Feng Tay Enterprises | Fulgent Sun vs. Pou Chen Corp | Fulgent Sun vs. Taiwan Paiho | Fulgent Sun vs. Merida Industry Co |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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