Correlation Between Chia Yi and Onyx Healthcare
Can any of the company-specific risk be diversified away by investing in both Chia Yi and Onyx Healthcare 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 Onyx Healthcare 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 Onyx Healthcare, you can compare the effects of market volatilities on Chia Yi and Onyx Healthcare 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 Onyx Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Yi and Onyx Healthcare.
Diversification Opportunities for Chia Yi and Onyx Healthcare
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chia and Onyx is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Chia Yi Steel and Onyx Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onyx Healthcare 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 Onyx Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onyx Healthcare has no effect on the direction of Chia Yi i.e., Chia Yi and Onyx Healthcare go up and down completely randomly.
Pair Corralation between Chia Yi and Onyx Healthcare
Assuming the 90 days trading horizon Chia Yi Steel is expected to generate 2.3 times more return on investment than Onyx Healthcare. However, Chia Yi is 2.3 times more volatile than Onyx Healthcare. It trades about 0.1 of its potential returns per unit of risk. Onyx Healthcare is currently generating about -0.04 per unit of risk. If you would invest 1,035 in Chia Yi Steel on September 3, 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. Onyx Healthcare
Performance |
| Timeline |
| Chia Yi Steel |
| Onyx Healthcare |
Chia Yi and Onyx Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Yi and Onyx Healthcare
The main advantage of trading using opposite Chia Yi and Onyx Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Yi position performs unexpectedly, Onyx Healthcare 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 Onyx Healthcare will offset losses from the drop in Onyx Healthcare's long position.| Chia Yi vs. Catcher Technology Co | Chia Yi vs. Evergreen Steel Corp | Chia Yi vs. China Metal Products | Chia Yi vs. Chernan Metal Industrial |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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