Correlation Between Chiu Ting and Insyde Software
Can any of the company-specific risk be diversified away by investing in both Chiu Ting and Insyde Software 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 Insyde Software 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 Insyde Software, you can compare the effects of market volatilities on Chiu Ting and Insyde Software 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 Insyde Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiu Ting and Insyde Software.
Diversification Opportunities for Chiu Ting and Insyde Software
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chiu and Insyde is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Chiu Ting Machinery and Insyde Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insyde Software 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 Insyde Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insyde Software has no effect on the direction of Chiu Ting i.e., Chiu Ting and Insyde Software go up and down completely randomly.
Pair Corralation between Chiu Ting and Insyde Software
Assuming the 90 days trading horizon Chiu Ting is expected to generate 4.22 times less return on investment than Insyde Software. But when comparing it to its historical volatility, Chiu Ting Machinery is 1.46 times less risky than Insyde Software. It trades about 0.02 of its potential returns per unit of risk. Insyde Software is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 36,950 in Insyde Software on September 1, 2024 and sell it today you would earn a total of 9,850 from holding Insyde Software or generate 26.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiu Ting Machinery vs. Insyde Software
Performance |
| Timeline |
| Chiu Ting Machinery |
| Insyde Software |
Chiu Ting and Insyde Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiu Ting and Insyde Software
The main advantage of trading using opposite Chiu Ting and Insyde Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiu Ting position performs unexpectedly, Insyde Software 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 Insyde Software will offset losses from the drop in Insyde Software's long position.| Chiu Ting vs. BES Engineering Co | Chiu Ting vs. Continental Holdings Corp | Chiu Ting vs. Kee Tai Properties | Chiu Ting vs. Hung Sheng Construction |
| Insyde Software vs. Quanta Storage | Insyde Software vs. Eagle Cold Storage | Insyde Software vs. Ton Yi Industrial | Insyde Software vs. Coxon Precise Industrial |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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