Correlation Between Quintain Steel and Chih Lien
Can any of the company-specific risk be diversified away by investing in both Quintain Steel and Chih Lien 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 Quintain Steel and Chih Lien into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quintain Steel Co and Chih Lien Industrial, you can compare the effects of market volatilities on Quintain Steel and Chih Lien 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 Quintain Steel with a short position of Chih Lien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quintain Steel and Chih Lien.
Diversification Opportunities for Quintain Steel and Chih Lien
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Quintain and Chih is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Quintain Steel Co and Chih Lien Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chih Lien Industrial and Quintain Steel 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 Quintain Steel Co are associated (or correlated) with Chih Lien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chih Lien Industrial has no effect on the direction of Quintain Steel i.e., Quintain Steel and Chih Lien go up and down completely randomly.
Pair Corralation between Quintain Steel and Chih Lien
Assuming the 90 days trading horizon Quintain Steel Co is expected to under-perform the Chih Lien. In addition to that, Quintain Steel is 1.11 times more volatile than Chih Lien Industrial. It trades about -0.01 of its total potential returns per unit of risk. Chih Lien Industrial is currently generating about 0.02 per unit of volatility. If you would invest 1,850 in Chih Lien Industrial on September 3, 2024 and sell it today you would earn a total of 180.00 from holding Chih Lien Industrial or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quintain Steel Co vs. Chih Lien Industrial
Performance |
| Timeline |
| Quintain Steel |
| Chih Lien Industrial |
Quintain Steel and Chih Lien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quintain Steel and Chih Lien
The main advantage of trading using opposite Quintain Steel and Chih Lien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quintain Steel position performs unexpectedly, Chih Lien 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 Chih Lien will offset losses from the drop in Chih Lien's long position.The idea behind Quintain Steel Co and Chih Lien Industrial 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.| Chih Lien vs. Chung Hung Steel | Chih Lien vs. Quintain Steel Co | Chih Lien vs. Chun Yuan Steel | Chih Lien vs. Sheng Yu 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |