Correlation Between First Copper and Chien Shing
Can any of the company-specific risk be diversified away by investing in both First Copper and Chien Shing 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 First Copper and Chien Shing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Copper Technology and Chien Shing Stainless, you can compare the effects of market volatilities on First Copper and Chien Shing 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 First Copper with a short position of Chien Shing. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Copper and Chien Shing.
Diversification Opportunities for First Copper and Chien Shing
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Chien is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding First Copper Technology and Chien Shing Stainless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chien Shing Stainless and First Copper 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 First Copper Technology are associated (or correlated) with Chien Shing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chien Shing Stainless has no effect on the direction of First Copper i.e., First Copper and Chien Shing go up and down completely randomly.
Pair Corralation between First Copper and Chien Shing
Assuming the 90 days trading horizon First Copper Technology is expected to under-perform the Chien Shing. In addition to that, First Copper is 1.25 times more volatile than Chien Shing Stainless. It trades about -0.02 of its total potential returns per unit of risk. Chien Shing Stainless is currently generating about 0.01 per unit of volatility. If you would invest 1,085 in Chien Shing Stainless on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Chien Shing Stainless or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
First Copper Technology vs. Chien Shing Stainless
Performance |
| Timeline |
| First Copper Technology |
| Chien Shing Stainless |
First Copper and Chien Shing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Copper and Chien Shing
The main advantage of trading using opposite First Copper and Chien Shing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Copper position performs unexpectedly, Chien Shing 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 Chien Shing will offset losses from the drop in Chien Shing's long position.| First Copper vs. Basso Industry Corp | First Copper vs. Chung Hsin Electric Machinery | First Copper vs. TYC Brother Industrial | First Copper vs. TECO Electric Machinery |
| Chien Shing vs. Chung Hung Steel | Chien Shing vs. Chun Yuan Steel | Chien Shing vs. Yieh Hsing Enterprise | Chien Shing vs. Hsin Kuang Steel |
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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