Correlation Between Sun Race and Chaintech Technology
Can any of the company-specific risk be diversified away by investing in both Sun Race and Chaintech Technology 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 Sun Race and Chaintech Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Race Sturmey Archer and Chaintech Technology Corp, you can compare the effects of market volatilities on Sun Race and Chaintech Technology 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 Sun Race with a short position of Chaintech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Race and Chaintech Technology.
Diversification Opportunities for Sun Race and Chaintech Technology
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sun and Chaintech is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sun Race Sturmey Archer and Chaintech Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chaintech Technology Corp and Sun Race 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 Sun Race Sturmey Archer are associated (or correlated) with Chaintech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chaintech Technology Corp has no effect on the direction of Sun Race i.e., Sun Race and Chaintech Technology go up and down completely randomly.
Pair Corralation between Sun Race and Chaintech Technology
Assuming the 90 days trading horizon Sun Race Sturmey Archer is expected to under-perform the Chaintech Technology. But the stock apears to be less risky and, when comparing its historical volatility, Sun Race Sturmey Archer is 1.81 times less risky than Chaintech Technology. The stock trades about -0.08 of its potential returns per unit of risk. The Chaintech Technology Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,845 in Chaintech Technology Corp on September 3, 2024 and sell it today you would earn a total of 945.00 from holding Chaintech Technology Corp or generate 33.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Race Sturmey Archer vs. Chaintech Technology Corp
Performance |
| Timeline |
| Sun Race Sturmey |
| Chaintech Technology Corp |
Sun Race and Chaintech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Race and Chaintech Technology
The main advantage of trading using opposite Sun Race and Chaintech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Race position performs unexpectedly, Chaintech Technology 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 Chaintech Technology will offset losses from the drop in Chaintech Technology's long position.| Sun Race vs. Lee Chi Enterprises | Sun Race vs. Basso Industry Corp | Sun Race vs. Giant Manufacturing Co | Sun Race vs. Merida Industry Co |
| Chaintech Technology vs. Taiwan Semiconductor Manufacturing | Chaintech Technology vs. Yang Ming Marine | Chaintech Technology vs. ASE Industrial Holding | Chaintech Technology vs. AU Optronics |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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