Correlation Between Cheng Shin and Nantex Industry
Can any of the company-specific risk be diversified away by investing in both Cheng Shin and Nantex Industry 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 Cheng Shin and Nantex Industry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheng Shin Rubber and Nantex Industry Co, you can compare the effects of market volatilities on Cheng Shin and Nantex Industry 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 Cheng Shin with a short position of Nantex Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheng Shin and Nantex Industry.
Diversification Opportunities for Cheng Shin and Nantex Industry
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cheng and Nantex is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cheng Shin Rubber and Nantex Industry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nantex Industry and Cheng Shin 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 Cheng Shin Rubber are associated (or correlated) with Nantex Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nantex Industry has no effect on the direction of Cheng Shin i.e., Cheng Shin and Nantex Industry go up and down completely randomly.
Pair Corralation between Cheng Shin and Nantex Industry
Assuming the 90 days trading horizon Cheng Shin Rubber is expected to generate 1.09 times more return on investment than Nantex Industry. However, Cheng Shin is 1.09 times more volatile than Nantex Industry Co. It trades about 0.04 of its potential returns per unit of risk. Nantex Industry Co is currently generating about -0.01 per unit of risk. If you would invest 4,490 in Cheng Shin Rubber on August 25, 2024 and sell it today you would earn a total of 650.00 from holding Cheng Shin Rubber or generate 14.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheng Shin Rubber vs. Nantex Industry Co
Performance |
| Timeline |
| Cheng Shin Rubber |
| Nantex Industry |
Cheng Shin and Nantex Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheng Shin and Nantex Industry
The main advantage of trading using opposite Cheng Shin and Nantex Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheng Shin position performs unexpectedly, Nantex Industry 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 Nantex Industry will offset losses from the drop in Nantex Industry's long position.| Cheng Shin vs. Uni President Enterprises Corp | Cheng Shin vs. Formosa Chemicals Fibre | Cheng Shin vs. Asia Cement Corp | Cheng Shin vs. Pou Chen Corp |
| Nantex Industry vs. Cheng Shin Rubber | Nantex Industry vs. Taiwan Cement Corp | Nantex Industry vs. China Steel Chemical | Nantex Industry vs. Yulon Motor Co |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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