Correlation Between Chang Type and Hsin Ba
Can any of the company-specific risk be diversified away by investing in both Chang Type and Hsin Ba 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 Chang Type and Hsin Ba into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chang Type Industrial and Hsin Ba Ba, you can compare the effects of market volatilities on Chang Type and Hsin Ba 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 Chang Type with a short position of Hsin Ba. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chang Type and Hsin Ba.
Diversification Opportunities for Chang Type and Hsin Ba
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chang and Hsin is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Chang Type Industrial and Hsin Ba Ba in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsin Ba Ba and Chang Type 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 Chang Type Industrial are associated (or correlated) with Hsin Ba. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsin Ba Ba has no effect on the direction of Chang Type i.e., Chang Type and Hsin Ba go up and down completely randomly.
Pair Corralation between Chang Type and Hsin Ba
Assuming the 90 days trading horizon Chang Type Industrial is expected to generate 0.87 times more return on investment than Hsin Ba. However, Chang Type Industrial is 1.15 times less risky than Hsin Ba. It trades about -0.18 of its potential returns per unit of risk. Hsin Ba Ba is currently generating about -0.2 per unit of risk. If you would invest 2,805 in Chang Type Industrial on October 29, 2024 and sell it today you would lose (190.00) from holding Chang Type Industrial or give up 6.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chang Type Industrial vs. Hsin Ba Ba
Performance |
| Timeline |
| Chang Type Industrial |
| Hsin Ba Ba |
Chang Type and Hsin Ba Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chang Type and Hsin Ba
The main advantage of trading using opposite Chang Type and Hsin Ba positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chang Type position performs unexpectedly, Hsin Ba 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 Hsin Ba will offset losses from the drop in Hsin Ba's long position.| Chang Type vs. Asia Electronic Material | Chang Type vs. Union Insurance Co | Chang Type vs. Elite Material Co | Chang Type vs. Central Reinsurance Corp |
| Hsin Ba vs. Great China Metal | Hsin Ba vs. Ton Yi Industrial | Hsin Ba vs. Ching Feng Home | Hsin Ba vs. Choice Development |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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