Correlation Between Avision and Ching Feng
Can any of the company-specific risk be diversified away by investing in both Avision and Ching Feng 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 Avision and Ching Feng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avision and Ching Feng Home, you can compare the effects of market volatilities on Avision and Ching Feng 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 Avision with a short position of Ching Feng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avision and Ching Feng.
Diversification Opportunities for Avision and Ching Feng
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Avision and Ching is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Avision and Ching Feng Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ching Feng Home and Avision 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 Avision are associated (or correlated) with Ching Feng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ching Feng Home has no effect on the direction of Avision i.e., Avision and Ching Feng go up and down completely randomly.
Pair Corralation between Avision and Ching Feng
Assuming the 90 days trading horizon Avision is expected to under-perform the Ching Feng. But the stock apears to be less risky and, when comparing its historical volatility, Avision is 1.03 times less risky than Ching Feng. The stock trades about -0.08 of its potential returns per unit of risk. The Ching Feng Home is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,765 in Ching Feng Home on September 3, 2024 and sell it today you would earn a total of 1,325 from holding Ching Feng Home or generate 75.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avision vs. Ching Feng Home
Performance |
| Timeline |
| Avision |
| Ching Feng Home |
Avision and Ching Feng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avision and Ching Feng
The main advantage of trading using opposite Avision and Ching Feng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avision position performs unexpectedly, Ching Feng 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 Ching Feng will offset losses from the drop in Ching Feng's long position.| Avision vs. KYE Systems Corp | Avision vs. Clevo Co | Avision vs. Silicon Integrated Systems | Avision vs. Ability Enterprise Co |
| Ching Feng vs. Tainan Spinning Co | Ching Feng vs. Chia Her Industrial | Ching Feng vs. WiseChip Semiconductor | Ching Feng vs. Novatek Microelectronics 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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