Correlation Between Nankang Rubber and Chialin Precision
Can any of the company-specific risk be diversified away by investing in both Nankang Rubber and Chialin Precision 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 Nankang Rubber and Chialin Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nankang Rubber Tire and Chialin Precision Industrial, you can compare the effects of market volatilities on Nankang Rubber and Chialin Precision 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 Nankang Rubber with a short position of Chialin Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nankang Rubber and Chialin Precision.
Diversification Opportunities for Nankang Rubber and Chialin Precision
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nankang and Chialin is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Nankang Rubber Tire and Chialin Precision Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chialin Precision and Nankang Rubber 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 Nankang Rubber Tire are associated (or correlated) with Chialin Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chialin Precision has no effect on the direction of Nankang Rubber i.e., Nankang Rubber and Chialin Precision go up and down completely randomly.
Pair Corralation between Nankang Rubber and Chialin Precision
Assuming the 90 days trading horizon Nankang Rubber Tire is expected to under-perform the Chialin Precision. In addition to that, Nankang Rubber is 1.83 times more volatile than Chialin Precision Industrial. It trades about -0.03 of its total potential returns per unit of risk. Chialin Precision Industrial is currently generating about 0.14 per unit of volatility. If you would invest 8,400 in Chialin Precision Industrial on August 30, 2024 and sell it today you would earn a total of 290.00 from holding Chialin Precision Industrial or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nankang Rubber Tire vs. Chialin Precision Industrial
Performance |
| Timeline |
| Nankang Rubber Tire |
| Chialin Precision |
Nankang Rubber and Chialin Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nankang Rubber and Chialin Precision
The main advantage of trading using opposite Nankang Rubber and Chialin Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nankang Rubber position performs unexpectedly, Chialin Precision 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 Chialin Precision will offset losses from the drop in Chialin Precision's long position.| Nankang Rubber vs. Yulon Motor Co | Nankang Rubber vs. Federal Corp | Nankang Rubber vs. Kenda Rubber Industrial | Nankang Rubber vs. Taiwan Glass Ind |
| Chialin Precision vs. Hon Hai Precision | Chialin Precision vs. Delta Electronics | Chialin Precision vs. LARGAN Precision Co | Chialin Precision vs. E Ink Holdings |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |