Correlation Between Chi Hua and Giant Manufacturing
Can any of the company-specific risk be diversified away by investing in both Chi Hua and Giant Manufacturing 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 Giant Manufacturing 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 Giant Manufacturing Co, you can compare the effects of market volatilities on Chi Hua and Giant Manufacturing 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 Giant Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Hua and Giant Manufacturing.
Diversification Opportunities for Chi Hua and Giant Manufacturing
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chi and Giant is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Chi Hua Fitness and Giant Manufacturing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giant Manufacturing 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 Giant Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giant Manufacturing has no effect on the direction of Chi Hua i.e., Chi Hua and Giant Manufacturing go up and down completely randomly.
Pair Corralation between Chi Hua and Giant Manufacturing
Assuming the 90 days trading horizon Chi Hua Fitness is expected to generate 0.62 times more return on investment than Giant Manufacturing. However, Chi Hua Fitness is 1.62 times less risky than Giant Manufacturing. It trades about -0.06 of its potential returns per unit of risk. Giant Manufacturing Co is currently generating about -0.11 per unit of risk. If you would invest 4,239 in Chi Hua Fitness on August 29, 2024 and sell it today you would lose (514.00) from holding Chi Hua Fitness or give up 12.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chi Hua Fitness vs. Giant Manufacturing Co
Performance |
| Timeline |
| Chi Hua Fitness |
| Giant Manufacturing |
Chi Hua and Giant Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chi Hua and Giant Manufacturing
The main advantage of trading using opposite Chi Hua and Giant Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Hua position performs unexpectedly, Giant Manufacturing 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 Giant Manufacturing will offset losses from the drop in Giant Manufacturing'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 |
| Giant Manufacturing vs. Merida Industry Co | Giant Manufacturing vs. President Chain Store | Giant Manufacturing vs. Cheng Shin Rubber | Giant Manufacturing vs. Uni President Enterprises 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 CEOs Directory module to screen CEOs from public companies around the world.
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