Correlation Between Chia Yi and Kingstate Electronics
Can any of the company-specific risk be diversified away by investing in both Chia Yi and Kingstate Electronics 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 Kingstate Electronics 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 Kingstate Electronics, you can compare the effects of market volatilities on Chia Yi and Kingstate Electronics 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 Kingstate Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Yi and Kingstate Electronics.
Diversification Opportunities for Chia Yi and Kingstate Electronics
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chia and Kingstate is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Chia Yi Steel and Kingstate Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingstate Electronics 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 Kingstate Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingstate Electronics has no effect on the direction of Chia Yi i.e., Chia Yi and Kingstate Electronics go up and down completely randomly.
Pair Corralation between Chia Yi and Kingstate Electronics
Assuming the 90 days trading horizon Chia Yi Steel is expected to generate 2.61 times more return on investment than Kingstate Electronics. However, Chia Yi is 2.61 times more volatile than Kingstate Electronics. It trades about -0.02 of its potential returns per unit of risk. Kingstate Electronics is currently generating about -0.1 per unit of risk. If you would invest 1,135 in Chia Yi Steel on September 12, 2024 and sell it today you would lose (30.00) from holding Chia Yi Steel or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chia Yi Steel vs. Kingstate Electronics
Performance |
| Timeline |
| Chia Yi Steel |
| Kingstate Electronics |
Chia Yi and Kingstate Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Yi and Kingstate Electronics
The main advantage of trading using opposite Chia Yi and Kingstate Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Yi position performs unexpectedly, Kingstate Electronics 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 Kingstate Electronics will offset losses from the drop in Kingstate Electronics' long position.| Chia Yi vs. Catcher Technology Co | Chia Yi vs. Solar Applied Materials | Chia Yi vs. Evergreen Steel Corp | Chia Yi vs. Shin Zu Shing |
| Kingstate Electronics vs. Grand Ocean Retail | Kingstate Electronics vs. Tehmag Foods | Kingstate Electronics vs. Sports Gear Co | Kingstate Electronics vs. Simple Mart Retail |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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