Correlation Between Chia Yi and Sheng Yu
Can any of the company-specific risk be diversified away by investing in both Chia Yi and Sheng Yu 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 Chia Yi and Sheng Yu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia Yi Steel and Sheng Yu Steel, you can compare the effects of market volatilities on Chia Yi and Sheng Yu 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 Chia Yi with a short position of Sheng Yu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Yi and Sheng Yu.
Diversification Opportunities for Chia Yi and Sheng Yu
Good diversification
The 3 months correlation between Chia and Sheng is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Chia Yi Steel and Sheng Yu Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sheng Yu Steel and Chia Yi 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 Chia Yi Steel are associated (or correlated) with Sheng Yu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sheng Yu Steel has no effect on the direction of Chia Yi i.e., Chia Yi and Sheng Yu go up and down completely randomly.
Pair Corralation between Chia Yi and Sheng Yu
Assuming the 90 days trading horizon Chia Yi Steel is expected to generate 5.42 times more return on investment than Sheng Yu. However, Chia Yi is 5.42 times more volatile than Sheng Yu Steel. It trades about 0.1 of its potential returns per unit of risk. Sheng Yu Steel is currently generating about -0.29 per unit of risk. If you would invest 1,035 in Chia Yi Steel on September 1, 2024 and sell it today you would earn a total of 85.00 from holding Chia Yi Steel or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chia Yi Steel vs. Sheng Yu Steel
Performance |
| Timeline |
| Chia Yi Steel |
| Sheng Yu Steel |
Chia Yi and Sheng Yu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Yi and Sheng Yu
The main advantage of trading using opposite Chia Yi and Sheng Yu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Yi position performs unexpectedly, Sheng Yu 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 Sheng Yu will offset losses from the drop in Sheng Yu's long position.| Chia Yi vs. Yang Ming Marine | Chia Yi vs. Wan Hai Lines | Chia Yi vs. Hsin Kuang Steel | Chia Yi vs. Evergreen Marine Corp |
| Sheng Yu vs. Yieh Phui Enterprise | Sheng Yu vs. Tung Ho Steel | Sheng Yu vs. Feng Hsin Steel | Sheng Yu vs. Chung Hung 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |