Correlation Between Chroma ATE and New Advanced
Can any of the company-specific risk be diversified away by investing in both Chroma ATE and New Advanced 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 Chroma ATE and New Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chroma ATE and New Advanced Electronics, you can compare the effects of market volatilities on Chroma ATE and New Advanced 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 Chroma ATE with a short position of New Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chroma ATE and New Advanced.
Diversification Opportunities for Chroma ATE and New Advanced
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chroma and New is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Chroma ATE and New Advanced Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Advanced Electronics and Chroma ATE 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 Chroma ATE are associated (or correlated) with New Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Advanced Electronics has no effect on the direction of Chroma ATE i.e., Chroma ATE and New Advanced go up and down completely randomly.
Pair Corralation between Chroma ATE and New Advanced
Assuming the 90 days trading horizon Chroma ATE is expected to generate 1.54 times more return on investment than New Advanced. However, Chroma ATE is 1.54 times more volatile than New Advanced Electronics. It trades about 0.09 of its potential returns per unit of risk. New Advanced Electronics is currently generating about -0.19 per unit of risk. If you would invest 37,350 in Chroma ATE on August 29, 2024 and sell it today you would earn a total of 3,550 from holding Chroma ATE or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chroma ATE vs. New Advanced Electronics
Performance |
| Timeline |
| Chroma ATE |
| New Advanced Electronics |
Chroma ATE and New Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chroma ATE and New Advanced
The main advantage of trading using opposite Chroma ATE and New Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chroma ATE position performs unexpectedly, New Advanced 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 New Advanced will offset losses from the drop in New Advanced's long position.| Chroma ATE vs. Novatek Microelectronics Corp | Chroma ATE vs. Sitronix Technology Corp | Chroma ATE vs. Elan Microelectronics Corp | Chroma ATE vs. Global Unichip Corp |
| New Advanced vs. Syntek Semiconductor Co | New Advanced vs. Powerchip Semiconductor Manufacturing | New Advanced vs. Realtek Semiconductor Corp | New Advanced vs. FarGlory Hotel 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 CEOs Directory module to screen CEOs from public companies around the world.
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