Correlation Between Sampo Corp and Chicony Power
Can any of the company-specific risk be diversified away by investing in both Sampo Corp 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 Sampo Corp and Chicony Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sampo Corp and Chicony Power Technology, you can compare the effects of market volatilities on Sampo Corp 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 Sampo Corp with a short position of Chicony Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo Corp and Chicony Power.
Diversification Opportunities for Sampo Corp and Chicony Power
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sampo and Chicony is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sampo Corp 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 Sampo Corp 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 Sampo Corp 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 Sampo Corp i.e., Sampo Corp and Chicony Power go up and down completely randomly.
Pair Corralation between Sampo Corp and Chicony Power
Assuming the 90 days trading horizon Sampo Corp is expected to generate 0.32 times more return on investment than Chicony Power. However, Sampo Corp is 3.1 times less risky than Chicony Power. It trades about -0.01 of its potential returns per unit of risk. Chicony Power Technology is currently generating about -0.06 per unit of risk. If you would invest 2,890 in Sampo Corp on August 29, 2024 and sell it today you would lose (45.00) from holding Sampo Corp or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sampo Corp vs. Chicony Power Technology
Performance |
| Timeline |
| Sampo Corp |
| Chicony Power Technology |
Sampo Corp and Chicony Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo Corp and Chicony Power
The main advantage of trading using opposite Sampo Corp and Chicony Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo Corp 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.| Sampo Corp vs. Yulon Finance Corp | Sampo Corp vs. Taiwan Secom Co | Sampo Corp vs. Pou Chen Corp | Sampo Corp vs. Great Wall Enterprise |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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