Correlation Between Hota Industrial and Chia Chang
Can any of the company-specific risk be diversified away by investing in both Hota Industrial and Chia Chang 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 Hota Industrial and Chia Chang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hota Industrial Mfg and Chia Chang Co, you can compare the effects of market volatilities on Hota Industrial and Chia Chang 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 Hota Industrial with a short position of Chia Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hota Industrial and Chia Chang.
Diversification Opportunities for Hota Industrial and Chia Chang
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hota and Chia is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hota Industrial Mfg and Chia Chang Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chia Chang and Hota Industrial 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 Hota Industrial Mfg are associated (or correlated) with Chia Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chia Chang has no effect on the direction of Hota Industrial i.e., Hota Industrial and Chia Chang go up and down completely randomly.
Pair Corralation between Hota Industrial and Chia Chang
Assuming the 90 days trading horizon Hota Industrial Mfg is expected to under-perform the Chia Chang. In addition to that, Hota Industrial is 5.35 times more volatile than Chia Chang Co. It trades about -0.11 of its total potential returns per unit of risk. Chia Chang Co is currently generating about -0.19 per unit of volatility. If you would invest 4,145 in Chia Chang Co on October 25, 2024 and sell it today you would lose (95.00) from holding Chia Chang Co or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hota Industrial Mfg vs. Chia Chang Co
Performance |
| Timeline |
| Hota Industrial Mfg |
| Chia Chang |
Hota Industrial and Chia Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hota Industrial and Chia Chang
The main advantage of trading using opposite Hota Industrial and Chia Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hota Industrial position performs unexpectedly, Chia Chang 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 Chia Chang will offset losses from the drop in Chia Chang's long position.| Hota Industrial vs. BizLink Holding | Hota Industrial vs. Delta Electronics | Hota Industrial vs. Eclat Textile Co | Hota Industrial vs. Chroma ATE |
| Chia Chang vs. FSP Technology | Chia Chang vs. HannStar Board Corp | Chia Chang vs. Taiwan Surface Mounting | Chia Chang vs. Emerging Display Technologies |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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