Correlation Between Chung Hung and Quintain Steel
Can any of the company-specific risk be diversified away by investing in both Chung Hung and Quintain Steel 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 Quintain Steel 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 Quintain Steel Co, you can compare the effects of market volatilities on Chung Hung and Quintain Steel 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 Quintain Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Hung and Quintain Steel.
Diversification Opportunities for Chung Hung and Quintain Steel
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chung and Quintain is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Chung Hung Steel and Quintain Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quintain Steel 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 Quintain Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quintain Steel has no effect on the direction of Chung Hung i.e., Chung Hung and Quintain Steel go up and down completely randomly.
Pair Corralation between Chung Hung and Quintain Steel
Assuming the 90 days trading horizon Chung Hung Steel is expected to under-perform the Quintain Steel. In addition to that, Chung Hung is 1.04 times more volatile than Quintain Steel Co. It trades about -0.02 of its total potential returns per unit of risk. Quintain Steel Co is currently generating about -0.01 per unit of volatility. If you would invest 1,343 in Quintain Steel Co on September 3, 2024 and sell it today you would lose (188.00) from holding Quintain Steel Co or give up 14.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Hung Steel vs. Quintain Steel Co
Performance |
| Timeline |
| Chung Hung Steel |
| Quintain Steel |
Chung Hung and Quintain Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Hung and Quintain Steel
The main advantage of trading using opposite Chung Hung and Quintain Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Hung position performs unexpectedly, Quintain Steel 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 Quintain Steel will offset losses from the drop in Quintain Steel's long position.The idea behind Chung Hung Steel and Quintain Steel Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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