Correlation Between Chroma ATE and Ennostar
Can any of the company-specific risk be diversified away by investing in both Chroma ATE and Ennostar 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 Ennostar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chroma ATE and Ennostar, you can compare the effects of market volatilities on Chroma ATE and Ennostar 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 Ennostar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chroma ATE and Ennostar.
Diversification Opportunities for Chroma ATE and Ennostar
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chroma and Ennostar is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Chroma ATE and Ennostar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ennostar 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 Ennostar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ennostar has no effect on the direction of Chroma ATE i.e., Chroma ATE and Ennostar go up and down completely randomly.
Pair Corralation between Chroma ATE and Ennostar
Assuming the 90 days trading horizon Chroma ATE is expected to generate 1.46 times more return on investment than Ennostar. However, Chroma ATE is 1.46 times more volatile than Ennostar. It trades about 0.1 of its potential returns per unit of risk. Ennostar is currently generating about 0.03 per unit of risk. If you would invest 29,350 in Chroma ATE on August 25, 2024 and sell it today you would earn a total of 11,850 from holding Chroma ATE or generate 40.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chroma ATE vs. Ennostar
Performance |
| Timeline |
| Chroma ATE |
| Ennostar |
Chroma ATE and Ennostar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chroma ATE and Ennostar
The main advantage of trading using opposite Chroma ATE and Ennostar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chroma ATE position performs unexpectedly, Ennostar 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 Ennostar will offset losses from the drop in Ennostar's long position.| Chroma ATE vs. Novatek Microelectronics Corp | Chroma ATE vs. Quanta Computer | Chroma ATE vs. United Microelectronics |
| Ennostar vs. Innolux Corp | Ennostar vs. United Renewable Energy | Ennostar vs. Acbel Polytech | Ennostar vs. Gigastorage Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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