Correlation Between Chung Hung and Easywell Biomedicals
Can any of the company-specific risk be diversified away by investing in both Chung Hung and Easywell Biomedicals 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 Chung Hung and Easywell Biomedicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chung Hung Steel and Easywell Biomedicals, you can compare the effects of market volatilities on Chung Hung and Easywell Biomedicals 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 Chung Hung with a short position of Easywell Biomedicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Hung and Easywell Biomedicals.
Diversification Opportunities for Chung Hung and Easywell Biomedicals
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chung and Easywell is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Chung Hung Steel and Easywell Biomedicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easywell Biomedicals and Chung Hung 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 Chung Hung Steel are associated (or correlated) with Easywell Biomedicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easywell Biomedicals has no effect on the direction of Chung Hung i.e., Chung Hung and Easywell Biomedicals go up and down completely randomly.
Pair Corralation between Chung Hung and Easywell Biomedicals
Assuming the 90 days trading horizon Chung Hung Steel is expected to generate 0.48 times more return on investment than Easywell Biomedicals. However, Chung Hung Steel is 2.1 times less risky than Easywell Biomedicals. It trades about -0.05 of its potential returns per unit of risk. Easywell Biomedicals is currently generating about -0.34 per unit of risk. If you would invest 2,055 in Chung Hung Steel on August 31, 2024 and sell it today you would lose (60.00) from holding Chung Hung Steel or give up 2.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Hung Steel vs. Easywell Biomedicals
Performance |
| Timeline |
| Chung Hung Steel |
| Easywell Biomedicals |
Chung Hung and Easywell Biomedicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Hung and Easywell Biomedicals
The main advantage of trading using opposite Chung Hung and Easywell Biomedicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Hung position performs unexpectedly, Easywell Biomedicals 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 Easywell Biomedicals will offset losses from the drop in Easywell Biomedicals' long position.| Chung Hung vs. China Steel Corp | Chung Hung vs. Yieh Phui Enterprise | Chung Hung vs. Ta Chen Stainless | Chung Hung vs. Yang Ming Marine |
| Easywell Biomedicals vs. U Ming Marine Transport | Easywell Biomedicals vs. Grand Ocean Retail | Easywell Biomedicals vs. Camellia Metal Co | Easywell Biomedicals vs. Newretail 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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