Correlation Between Chroma ATE and Handa Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Chroma ATE and Handa Pharmaceuticals 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 Handa Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chroma ATE and Handa Pharmaceuticals, you can compare the effects of market volatilities on Chroma ATE and Handa Pharmaceuticals 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 Handa Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chroma ATE and Handa Pharmaceuticals.
Diversification Opportunities for Chroma ATE and Handa Pharmaceuticals
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chroma and Handa is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Chroma ATE and Handa Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handa Pharmaceuticals 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 Handa Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handa Pharmaceuticals has no effect on the direction of Chroma ATE i.e., Chroma ATE and Handa Pharmaceuticals go up and down completely randomly.
Pair Corralation between Chroma ATE and Handa Pharmaceuticals
Assuming the 90 days trading horizon Chroma ATE is expected to generate 0.85 times more return on investment than Handa Pharmaceuticals. However, Chroma ATE is 1.18 times less risky than Handa Pharmaceuticals. It trades about 0.08 of its potential returns per unit of risk. Handa Pharmaceuticals is currently generating about -0.02 per unit of risk. If you would invest 17,750 in Chroma ATE on August 30, 2024 and sell it today you would earn a total of 22,950 from holding Chroma ATE or generate 129.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Chroma ATE vs. Handa Pharmaceuticals
Performance |
| Timeline |
| Chroma ATE |
| Handa Pharmaceuticals |
Chroma ATE and Handa Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chroma ATE and Handa Pharmaceuticals
The main advantage of trading using opposite Chroma ATE and Handa Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chroma ATE position performs unexpectedly, Handa Pharmaceuticals 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 Handa Pharmaceuticals will offset losses from the drop in Handa Pharmaceuticals' long position.| Chroma ATE vs. Accton Technology Corp | Chroma ATE vs. Delta Electronics | Chroma ATE vs. Chicony Electronics Co | Chroma ATE vs. Advantech Co |
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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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