Correlation Between Chunghwa Chemical and Medigen Vaccine
Can any of the company-specific risk be diversified away by investing in both Chunghwa Chemical and Medigen Vaccine 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 Chunghwa Chemical and Medigen Vaccine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chunghwa Chemical Synthesis and Medigen Vaccine Biologics, you can compare the effects of market volatilities on Chunghwa Chemical and Medigen Vaccine 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 Chunghwa Chemical with a short position of Medigen Vaccine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Chemical and Medigen Vaccine.
Diversification Opportunities for Chunghwa Chemical and Medigen Vaccine
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chunghwa and Medigen is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Chemical Synthesis and Medigen Vaccine Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medigen Vaccine Biologics and Chunghwa 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 Chunghwa Chemical Synthesis are associated (or correlated) with Medigen Vaccine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medigen Vaccine Biologics has no effect on the direction of Chunghwa Chemical i.e., Chunghwa Chemical and Medigen Vaccine go up and down completely randomly.
Pair Corralation between Chunghwa Chemical and Medigen Vaccine
Assuming the 90 days trading horizon Chunghwa Chemical Synthesis is expected to under-perform the Medigen Vaccine. But the stock apears to be less risky and, when comparing its historical volatility, Chunghwa Chemical Synthesis is 1.24 times less risky than Medigen Vaccine. The stock trades about -0.32 of its potential returns per unit of risk. The Medigen Vaccine Biologics is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 4,150 in Medigen Vaccine Biologics on September 1, 2024 and sell it today you would lose (220.00) from holding Medigen Vaccine Biologics or give up 5.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chunghwa Chemical Synthesis vs. Medigen Vaccine Biologics
Performance |
| Timeline |
| Chunghwa Chemical |
| Medigen Vaccine Biologics |
Chunghwa Chemical and Medigen Vaccine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Chemical and Medigen Vaccine
The main advantage of trading using opposite Chunghwa Chemical and Medigen Vaccine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Chemical position performs unexpectedly, Medigen Vaccine 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 Medigen Vaccine will offset losses from the drop in Medigen Vaccine's long position.| Chunghwa Chemical vs. Taiwan Semiconductor Manufacturing | Chunghwa Chemical vs. Hon Hai Precision | Chunghwa Chemical vs. MediaTek | Chunghwa Chemical vs. Chunghwa Telecom Co |
| Medigen Vaccine vs. Evergreen Marine Corp | Medigen Vaccine vs. Yang Ming Marine | Medigen Vaccine vs. Eva Airways Corp | Medigen Vaccine vs. Wan Hai Lines |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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