Correlation Between Chun Yuan and Advanced Analog
Can any of the company-specific risk be diversified away by investing in both Chun Yuan and Advanced Analog 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 Chun Yuan and Advanced Analog into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chun Yuan Steel and Advanced Analog Technology, you can compare the effects of market volatilities on Chun Yuan and Advanced Analog 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 Chun Yuan with a short position of Advanced Analog. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chun Yuan and Advanced Analog.
Diversification Opportunities for Chun Yuan and Advanced Analog
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chun and Advanced is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Chun Yuan Steel and Advanced Analog Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Analog Tech and Chun Yuan 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 Chun Yuan Steel are associated (or correlated) with Advanced Analog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Analog Tech has no effect on the direction of Chun Yuan i.e., Chun Yuan and Advanced Analog go up and down completely randomly.
Pair Corralation between Chun Yuan and Advanced Analog
Assuming the 90 days trading horizon Chun Yuan is expected to generate 1.66 times less return on investment than Advanced Analog. But when comparing it to its historical volatility, Chun Yuan Steel is 1.63 times less risky than Advanced Analog. It trades about 0.01 of its potential returns per unit of risk. Advanced Analog Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6,940 in Advanced Analog Technology on September 14, 2024 and sell it today you would lose (100.00) from holding Advanced Analog Technology or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chun Yuan Steel vs. Advanced Analog Technology
Performance |
| Timeline |
| Chun Yuan Steel |
| Advanced Analog Tech |
Chun Yuan and Advanced Analog Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chun Yuan and Advanced Analog
The main advantage of trading using opposite Chun Yuan and Advanced Analog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chun Yuan position performs unexpectedly, Advanced Analog 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 Advanced Analog will offset losses from the drop in Advanced Analog's long position.| Chun Yuan vs. Tainan Spinning Co | Chun Yuan vs. Lealea Enterprise Co | Chun Yuan vs. China Petrochemical Development | Chun Yuan vs. Ruentex Development Co |
| Advanced Analog vs. Taiwan Speciality Chemicals | Advanced Analog vs. Chien Kuo Construction | Advanced Analog vs. Great China Metal | Advanced Analog vs. Mechema Chemicals Int |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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