Correlation Between Chun Yuan and Asia Tech
Can any of the company-specific risk be diversified away by investing in both Chun Yuan and Asia Tech 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 Asia Tech 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 Asia Tech Image, you can compare the effects of market volatilities on Chun Yuan and Asia Tech 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 Asia Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chun Yuan and Asia Tech.
Diversification Opportunities for Chun Yuan and Asia Tech
Excellent diversification
The 3 months correlation between Chun and Asia is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Chun Yuan Steel and Asia Tech Image in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Tech Image 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 Asia Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Tech Image has no effect on the direction of Chun Yuan i.e., Chun Yuan and Asia Tech go up and down completely randomly.
Pair Corralation between Chun Yuan and Asia Tech
Assuming the 90 days trading horizon Chun Yuan is expected to generate 9.61 times less return on investment than Asia Tech. But when comparing it to its historical volatility, Chun Yuan Steel is 1.32 times less risky than Asia Tech. It trades about 0.01 of its potential returns per unit of risk. Asia Tech Image is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,690 in Asia Tech Image on September 14, 2024 and sell it today you would earn a total of 2,370 from holding Asia Tech Image or generate 35.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chun Yuan Steel vs. Asia Tech Image
Performance |
| Timeline |
| Chun Yuan Steel |
| Asia Tech Image |
Chun Yuan and Asia Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chun Yuan and Asia Tech
The main advantage of trading using opposite Chun Yuan and Asia Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chun Yuan position performs unexpectedly, Asia Tech 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 Asia Tech will offset losses from the drop in Asia Tech'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 |
| Asia Tech vs. Taiwan Chinsan Electronic | Asia Tech vs. Ligitek Electronics Co | Asia Tech vs. Ablerex Electronics Co | Asia Tech vs. Universal Microelectronics Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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