Correlation Between Yageo Corp and Chicony Power
Can any of the company-specific risk be diversified away by investing in both Yageo Corp and Chicony Power 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 Yageo Corp and Chicony Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yageo Corp and Chicony Power Technology, you can compare the effects of market volatilities on Yageo Corp and Chicony Power 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 Yageo Corp with a short position of Chicony Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yageo Corp and Chicony Power.
Diversification Opportunities for Yageo Corp and Chicony Power
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yageo and Chicony is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Yageo Corp and Chicony Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicony Power Technology and Yageo Corp 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 Yageo Corp are associated (or correlated) with Chicony Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicony Power Technology has no effect on the direction of Yageo Corp i.e., Yageo Corp and Chicony Power go up and down completely randomly.
Pair Corralation between Yageo Corp and Chicony Power
Assuming the 90 days trading horizon Yageo Corp is expected to generate 4.88 times less return on investment than Chicony Power. But when comparing it to its historical volatility, Yageo Corp is 1.4 times less risky than Chicony Power. It trades about 0.02 of its potential returns per unit of risk. Chicony Power Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,490 in Chicony Power Technology on September 1, 2024 and sell it today you would earn a total of 4,310 from holding Chicony Power Technology or generate 50.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yageo Corp vs. Chicony Power Technology
Performance |
| Timeline |
| Yageo Corp |
| Chicony Power Technology |
Yageo Corp and Chicony Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yageo Corp and Chicony Power
The main advantage of trading using opposite Yageo Corp and Chicony Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yageo Corp position performs unexpectedly, Chicony Power 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 Chicony Power will offset losses from the drop in Chicony Power's long position.| Yageo Corp vs. Chicony Power Technology | Yageo Corp vs. AzureWave Technologies | Yageo Corp vs. United Radiant Technology | Yageo Corp vs. Arbor Technology |
| Chicony Power vs. Ability Enterprise Co | Chicony Power vs. XAC Automation | Chicony Power vs. Cheng Fwa Industrial | Chicony Power vs. Kaulin Mfg |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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