Correlation Between Chung Hung and YC Inox
Can any of the company-specific risk be diversified away by investing in both Chung Hung and YC Inox 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 YC Inox 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 YC Inox Co, you can compare the effects of market volatilities on Chung Hung and YC Inox 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 YC Inox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Hung and YC Inox.
Diversification Opportunities for Chung Hung and YC Inox
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chung and 2034 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Chung Hung Steel and YC Inox Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YC Inox 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 YC Inox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YC Inox has no effect on the direction of Chung Hung i.e., Chung Hung and YC Inox go up and down completely randomly.
Pair Corralation between Chung Hung and YC Inox
Assuming the 90 days trading horizon Chung Hung is expected to generate 1.31 times less return on investment than YC Inox. In addition to that, Chung Hung is 1.01 times more volatile than YC Inox Co. It trades about 0.32 of its total potential returns per unit of risk. YC Inox Co is currently generating about 0.42 per unit of volatility. If you would invest 2,030 in YC Inox Co on November 28, 2024 and sell it today you would earn a total of 690.00 from holding YC Inox Co or generate 33.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Hung Steel vs. YC Inox Co
Performance |
| Timeline |
| Chung Hung Steel |
| YC Inox |
Chung Hung and YC Inox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Hung and YC Inox
The main advantage of trading using opposite Chung Hung and YC Inox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Hung position performs unexpectedly, YC Inox 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 YC Inox will offset losses from the drop in YC Inox's 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 |
| YC Inox vs. Ta Chen Stainless | YC Inox vs. Chung Hung Steel | YC Inox vs. Tung Ho Steel | YC Inox 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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