Correlation Between Sun Race and Chailease Holding
Can any of the company-specific risk be diversified away by investing in both Sun Race and Chailease Holding 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 Chailease Holding 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 Chailease Holding Co, you can compare the effects of market volatilities on Sun Race and Chailease Holding 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 Chailease Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Race and Chailease Holding.
Diversification Opportunities for Sun Race and Chailease Holding
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sun and Chailease is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sun Race Sturmey Archer and Chailease Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chailease Holding 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 Chailease Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chailease Holding has no effect on the direction of Sun Race i.e., Sun Race and Chailease Holding go up and down completely randomly.
Pair Corralation between Sun Race and Chailease Holding
Assuming the 90 days trading horizon Sun Race Sturmey Archer is expected to generate 0.88 times more return on investment than Chailease Holding. However, Sun Race Sturmey Archer is 1.14 times less risky than Chailease Holding. It trades about -0.07 of its potential returns per unit of risk. Chailease Holding Co is currently generating about -0.07 per unit of risk. If you would invest 4,000 in Sun Race Sturmey Archer on August 30, 2024 and sell it today you would lose (1,580) from holding Sun Race Sturmey Archer or give up 39.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Sun Race Sturmey Archer vs. Chailease Holding Co
Performance |
| Timeline |
| Sun Race Sturmey |
| Chailease Holding |
Sun Race and Chailease Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Race and Chailease Holding
The main advantage of trading using opposite Sun Race and Chailease Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Race position performs unexpectedly, Chailease Holding 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 Chailease Holding will offset losses from the drop in Chailease Holding'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 |
| Chailease Holding vs. Taiwan Secom Co | Chailease Holding vs. TTET Union Corp | Chailease Holding vs. China Steel Chemical | Chailease Holding vs. Taiwan Shin Kong |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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