Correlation Between Standard Chemical and Roo Hsing
Can any of the company-specific risk be diversified away by investing in both Standard Chemical and Roo Hsing 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 Standard Chemical and Roo Hsing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standard Chemical Pharmaceutical and Roo Hsing Co, you can compare the effects of market volatilities on Standard Chemical and Roo Hsing 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 Standard Chemical with a short position of Roo Hsing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Chemical and Roo Hsing.
Diversification Opportunities for Standard Chemical and Roo Hsing
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Standard and Roo is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Standard Chemical Pharmaceutic and Roo Hsing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roo Hsing and Standard Chemical 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 Standard Chemical Pharmaceutical are associated (or correlated) with Roo Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roo Hsing has no effect on the direction of Standard Chemical i.e., Standard Chemical and Roo Hsing go up and down completely randomly.
Pair Corralation between Standard Chemical and Roo Hsing
Assuming the 90 days trading horizon Standard Chemical is expected to generate 6.43 times less return on investment than Roo Hsing. But when comparing it to its historical volatility, Standard Chemical Pharmaceutical is 2.29 times less risky than Roo Hsing. It trades about 0.11 of its potential returns per unit of risk. Roo Hsing Co is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 290.00 in Roo Hsing Co on September 12, 2024 and sell it today you would earn a total of 34.00 from holding Roo Hsing Co or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Chemical Pharmaceutic vs. Roo Hsing Co
Performance |
| Timeline |
| Standard Chemical |
| Roo Hsing |
Standard Chemical and Roo Hsing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Chemical and Roo Hsing
The main advantage of trading using opposite Standard Chemical and Roo Hsing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Chemical position performs unexpectedly, Roo Hsing 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 Roo Hsing will offset losses from the drop in Roo Hsing's long position.| Standard Chemical vs. Apex Biotechnology Corp | Standard Chemical vs. Ruentex Development Co | Standard Chemical vs. WiseChip Semiconductor | Standard Chemical vs. Novatek Microelectronics Corp |
| Roo Hsing vs. Standard Chemical Pharmaceutical | Roo Hsing vs. New Asia Construction | Roo Hsing vs. Trade Van Information Services | Roo Hsing vs. Tait Marketing Distribution |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |