Correlation Between Chia Yi and King Chou
Can any of the company-specific risk be diversified away by investing in both Chia Yi and King Chou 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 King Chou 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 King Chou Marine, you can compare the effects of market volatilities on Chia Yi and King Chou 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 King Chou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Yi and King Chou.
Diversification Opportunities for Chia Yi and King Chou
Pay attention - limited upside
The 3 months correlation between Chia and King is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chia Yi Steel and King Chou Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on King Chou Marine 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 King Chou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of King Chou Marine has no effect on the direction of Chia Yi i.e., Chia Yi and King Chou go up and down completely randomly.
Pair Corralation between Chia Yi and King Chou
Assuming the 90 days trading horizon Chia Yi Steel is expected to under-perform the King Chou. In addition to that, Chia Yi is 3.59 times more volatile than King Chou Marine. It trades about -0.02 of its total potential returns per unit of risk. King Chou Marine is currently generating about 0.04 per unit of volatility. If you would invest 3,905 in King Chou Marine on September 12, 2024 and sell it today you would earn a total of 275.00 from holding King Chou Marine or generate 7.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Chia Yi Steel vs. King Chou Marine
Performance |
Timeline |
Chia Yi Steel |
King Chou Marine |
Chia Yi and King Chou Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chia Yi and King Chou
The main advantage of trading using opposite Chia Yi and King Chou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Yi position performs unexpectedly, King Chou 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 King Chou will offset losses from the drop in King Chou's 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 |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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