Correlation Between Solar Applied and Chaheng Precision
Can any of the company-specific risk be diversified away by investing in both Solar Applied and Chaheng Precision 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 Solar Applied and Chaheng Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solar Applied Materials and Chaheng Precision Co, you can compare the effects of market volatilities on Solar Applied and Chaheng Precision 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 Solar Applied with a short position of Chaheng Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solar Applied and Chaheng Precision.
Diversification Opportunities for Solar Applied and Chaheng Precision
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Solar and Chaheng is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Solar Applied Materials and Chaheng Precision Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chaheng Precision and Solar Applied 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 Solar Applied Materials are associated (or correlated) with Chaheng Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chaheng Precision has no effect on the direction of Solar Applied i.e., Solar Applied and Chaheng Precision go up and down completely randomly.
Pair Corralation between Solar Applied and Chaheng Precision
Assuming the 90 days trading horizon Solar Applied Materials is expected to under-perform the Chaheng Precision. In addition to that, Solar Applied is 1.03 times more volatile than Chaheng Precision Co. It trades about -0.34 of its total potential returns per unit of risk. Chaheng Precision Co is currently generating about 0.04 per unit of volatility. If you would invest 9,090 in Chaheng Precision Co on October 16, 2024 and sell it today you would earn a total of 110.00 from holding Chaheng Precision Co or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solar Applied Materials vs. Chaheng Precision Co
Performance |
| Timeline |
| Solar Applied Materials |
| Chaheng Precision |
Solar Applied and Chaheng Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solar Applied and Chaheng Precision
The main advantage of trading using opposite Solar Applied and Chaheng Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solar Applied position performs unexpectedly, Chaheng Precision 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 Chaheng Precision will offset losses from the drop in Chaheng Precision's long position.| Solar Applied vs. Wafer Works | Solar Applied vs. Sino American Silicon Products | Solar Applied vs. StShine Optical Co | Solar Applied vs. Phison Electronics |
| Chaheng Precision vs. Tai Tung Communication | Chaheng Precision vs. Pacific Hospital Supply | Chaheng Precision vs. Loop Telecommunication International | Chaheng Precision vs. International CSRC Investment |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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