Correlation Between Chiu Ting and Pacific Construction
Can any of the company-specific risk be diversified away by investing in both Chiu Ting and Pacific Construction 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 Chiu Ting and Pacific Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chiu Ting Machinery and Pacific Construction Co, you can compare the effects of market volatilities on Chiu Ting and Pacific Construction 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 Chiu Ting with a short position of Pacific Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiu Ting and Pacific Construction.
Diversification Opportunities for Chiu Ting and Pacific Construction
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chiu and Pacific is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Chiu Ting Machinery and Pacific Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Construction and Chiu Ting 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 Chiu Ting Machinery are associated (or correlated) with Pacific Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Construction has no effect on the direction of Chiu Ting i.e., Chiu Ting and Pacific Construction go up and down completely randomly.
Pair Corralation between Chiu Ting and Pacific Construction
Assuming the 90 days trading horizon Chiu Ting Machinery is expected to under-perform the Pacific Construction. But the stock apears to be less risky and, when comparing its historical volatility, Chiu Ting Machinery is 1.41 times less risky than Pacific Construction. The stock trades about -0.26 of its potential returns per unit of risk. The Pacific Construction Co is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,035 in Pacific Construction Co on August 28, 2024 and sell it today you would earn a total of 195.00 from holding Pacific Construction Co or generate 18.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiu Ting Machinery vs. Pacific Construction Co
Performance |
| Timeline |
| Chiu Ting Machinery |
| Pacific Construction |
Chiu Ting and Pacific Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiu Ting and Pacific Construction
The main advantage of trading using opposite Chiu Ting and Pacific Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiu Ting position performs unexpectedly, Pacific Construction 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 Pacific Construction will offset losses from the drop in Pacific Construction's long position.| Chiu Ting vs. Sunny Friend Environmental | Chiu Ting vs. TTET Union Corp | Chiu Ting vs. ECOVE Environment Corp | Chiu Ting vs. Yulon Finance Corp |
| Pacific Construction vs. Chainqui Construction Development | Pacific Construction vs. Zinwell | Pacific Construction vs. Symtek Automation Asia | Pacific Construction vs. CTCI Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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