Correlation Between Chi Hua and Chicony Power
Can any of the company-specific risk be diversified away by investing in both Chi Hua and Chicony Power 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 Chi Hua and Chicony Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chi Hua Fitness and Chicony Power Technology, you can compare the effects of market volatilities on Chi Hua and Chicony Power 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 Chi Hua with a short position of Chicony Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Hua and Chicony Power.
Diversification Opportunities for Chi Hua and Chicony Power
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chi and Chicony is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Chi Hua Fitness and Chicony Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicony Power Technology and Chi Hua 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 Chi Hua Fitness are associated (or correlated) with Chicony Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicony Power Technology has no effect on the direction of Chi Hua i.e., Chi Hua and Chicony Power go up and down completely randomly.
Pair Corralation between Chi Hua and Chicony Power
Assuming the 90 days trading horizon Chi Hua Fitness is expected to generate 7.21 times more return on investment than Chicony Power. However, Chi Hua is 7.21 times more volatile than Chicony Power Technology. It trades about 0.03 of its potential returns per unit of risk. Chicony Power Technology is currently generating about 0.05 per unit of risk. If you would invest 6,822 in Chi Hua Fitness on August 29, 2024 and sell it today you would lose (3,072) from holding Chi Hua Fitness or give up 45.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chi Hua Fitness vs. Chicony Power Technology
Performance |
| Timeline |
| Chi Hua Fitness |
| Chicony Power Technology |
Chi Hua and Chicony Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chi Hua and Chicony Power
The main advantage of trading using opposite Chi Hua and Chicony Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Hua position performs unexpectedly, Chicony Power 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 Chicony Power will offset losses from the drop in Chicony Power's long position.| Chi Hua vs. Feng Tay Enterprises | Chi Hua vs. Ruentex Materials Co | Chi Hua vs. Symtek Automation Asia | Chi Hua vs. CTCI Corp |
| Chicony Power vs. Merry Electronics Co | Chicony Power vs. E Lead Electronic Co | Chicony Power vs. Heran Co | Chicony Power vs. Zeng Hsing 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |