Correlation Between Chia Yi and Huang Hsiang
Can any of the company-specific risk be diversified away by investing in both Chia Yi and Huang Hsiang 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 Huang Hsiang 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 Huang Hsiang Construction, you can compare the effects of market volatilities on Chia Yi and Huang Hsiang 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 Huang Hsiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Yi and Huang Hsiang.
Diversification Opportunities for Chia Yi and Huang Hsiang
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chia and Huang is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Chia Yi Steel and Huang Hsiang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huang Hsiang Construction 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 Huang Hsiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huang Hsiang Construction has no effect on the direction of Chia Yi i.e., Chia Yi and Huang Hsiang go up and down completely randomly.
Pair Corralation between Chia Yi and Huang Hsiang
Assuming the 90 days trading horizon Chia Yi is expected to generate 2.59 times less return on investment than Huang Hsiang. In addition to that, Chia Yi is 1.35 times more volatile than Huang Hsiang Construction. It trades about 0.02 of its total potential returns per unit of risk. Huang Hsiang Construction is currently generating about 0.07 per unit of volatility. If you would invest 4,100 in Huang Hsiang Construction on August 31, 2024 and sell it today you would earn a total of 3,210 from holding Huang Hsiang Construction or generate 78.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chia Yi Steel vs. Huang Hsiang Construction
Performance |
| Timeline |
| Chia Yi Steel |
| Huang Hsiang Construction |
Chia Yi and Huang Hsiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Yi and Huang Hsiang
The main advantage of trading using opposite Chia Yi and Huang Hsiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Yi position performs unexpectedly, Huang Hsiang 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 Huang Hsiang will offset losses from the drop in Huang Hsiang's long position.| Chia Yi vs. Huang Hsiang Construction | Chia Yi vs. Pacific Construction Co | Chia Yi vs. Chung Lien Transportation | Chia Yi vs. FDC International Hotels |
| Huang Hsiang vs. Huaku Development Co | Huang Hsiang vs. Ruentex Development Co | Huang Hsiang vs. CTCI Corp | Huang Hsiang vs. Information Technology Total |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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