Correlation Between Chia Yi and Iron Force
Can any of the company-specific risk be diversified away by investing in both Chia Yi and Iron Force 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 Iron Force 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 Iron Force Industrial, you can compare the effects of market volatilities on Chia Yi and Iron Force 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 Iron Force. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Yi and Iron Force.
Diversification Opportunities for Chia Yi and Iron Force
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chia and Iron is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Chia Yi Steel and Iron Force Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Force Industrial 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 Iron Force. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Force Industrial has no effect on the direction of Chia Yi i.e., Chia Yi and Iron Force go up and down completely randomly.
Pair Corralation between Chia Yi and Iron Force
Assuming the 90 days trading horizon Chia Yi Steel is expected to generate 3.11 times more return on investment than Iron Force. However, Chia Yi is 3.11 times more volatile than Iron Force Industrial. It trades about 0.1 of its potential returns per unit of risk. Iron Force Industrial is currently generating about -0.22 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chia Yi Steel vs. Iron Force Industrial
Performance |
| Timeline |
| Chia Yi Steel |
| Iron Force Industrial |
Chia Yi and Iron Force Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Yi and Iron Force
The main advantage of trading using opposite Chia Yi and Iron Force positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Yi position performs unexpectedly, Iron Force 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 Iron Force will offset losses from the drop in Iron Force'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 |
| Iron Force vs. Hota Industrial Mfg | Iron Force vs. BizLink Holding | Iron Force vs. Cub Elecparts | Iron Force vs. Hu Lane Associate |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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