Correlation Between Zeng Hsing and Coretronic
Can any of the company-specific risk be diversified away by investing in both Zeng Hsing and Coretronic 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 Zeng Hsing and Coretronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zeng Hsing Industrial and Coretronic, you can compare the effects of market volatilities on Zeng Hsing and Coretronic 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 Zeng Hsing with a short position of Coretronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zeng Hsing and Coretronic.
Diversification Opportunities for Zeng Hsing and Coretronic
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zeng and Coretronic is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Zeng Hsing Industrial and Coretronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coretronic and Zeng Hsing 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 Zeng Hsing Industrial are associated (or correlated) with Coretronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coretronic has no effect on the direction of Zeng Hsing i.e., Zeng Hsing and Coretronic go up and down completely randomly.
Pair Corralation between Zeng Hsing and Coretronic
Assuming the 90 days trading horizon Zeng Hsing is expected to generate 1.14 times less return on investment than Coretronic. But when comparing it to its historical volatility, Zeng Hsing Industrial is 2.1 times less risky than Coretronic. It trades about 0.06 of its potential returns per unit of risk. Coretronic is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7,530 in Coretronic on October 25, 2024 and sell it today you would earn a total of 520.00 from holding Coretronic or generate 6.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Zeng Hsing Industrial vs. Coretronic
Performance |
| Timeline |
| Zeng Hsing Industrial |
| Coretronic |
Zeng Hsing and Coretronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zeng Hsing and Coretronic
The main advantage of trading using opposite Zeng Hsing and Coretronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zeng Hsing position performs unexpectedly, Coretronic 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 Coretronic will offset losses from the drop in Coretronic's long position.| Zeng Hsing vs. TTET Union Corp | Zeng Hsing vs. Shinkong Insurance Co | Zeng Hsing vs. Huaku Development Co | Zeng Hsing vs. China Steel Chemical |
| Coretronic vs. Qisda Corp | Coretronic vs. AU Optronics | Coretronic vs. Vanguard International Semiconductor | Coretronic vs. Lite On Technology 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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