Correlation Between Chiu Ting and WINSON Machinery
Can any of the company-specific risk be diversified away by investing in both Chiu Ting and WINSON Machinery 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 WINSON Machinery 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 WINSON Machinery Co, you can compare the effects of market volatilities on Chiu Ting and WINSON Machinery 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 WINSON Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiu Ting and WINSON Machinery.
Diversification Opportunities for Chiu Ting and WINSON Machinery
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chiu and WINSON is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Chiu Ting Machinery and WINSON Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WINSON Machinery 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 WINSON Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WINSON Machinery has no effect on the direction of Chiu Ting i.e., Chiu Ting and WINSON Machinery go up and down completely randomly.
Pair Corralation between Chiu Ting and WINSON Machinery
Assuming the 90 days trading horizon Chiu Ting Machinery is expected to generate 1.58 times more return on investment than WINSON Machinery. However, Chiu Ting is 1.58 times more volatile than WINSON Machinery Co. It trades about 0.04 of its potential returns per unit of risk. WINSON Machinery Co is currently generating about -0.01 per unit of risk. If you would invest 2,435 in Chiu Ting Machinery on August 28, 2024 and sell it today you would earn a total of 125.00 from holding Chiu Ting Machinery or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiu Ting Machinery vs. WINSON Machinery Co
Performance |
| Timeline |
| Chiu Ting Machinery |
| WINSON Machinery |
Chiu Ting and WINSON Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiu Ting and WINSON Machinery
The main advantage of trading using opposite Chiu Ting and WINSON Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiu Ting position performs unexpectedly, WINSON Machinery 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 WINSON Machinery will offset losses from the drop in WINSON Machinery'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 |
| WINSON Machinery vs. Cheng Shin Rubber | WINSON Machinery vs. China Steel Chemical | WINSON Machinery vs. Yulon Motor 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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