Correlation Between Elite Material and Chang Type
Can any of the company-specific risk be diversified away by investing in both Elite Material and Chang Type 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 Elite Material and Chang Type into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elite Material Co and Chang Type Industrial, you can compare the effects of market volatilities on Elite Material and Chang Type 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 Elite Material with a short position of Chang Type. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Material and Chang Type.
Diversification Opportunities for Elite Material and Chang Type
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elite and Chang is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Elite Material Co and Chang Type Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chang Type Industrial and Elite Material 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 Elite Material Co are associated (or correlated) with Chang Type. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chang Type Industrial has no effect on the direction of Elite Material i.e., Elite Material and Chang Type go up and down completely randomly.
Pair Corralation between Elite Material and Chang Type
Assuming the 90 days trading horizon Elite Material Co is expected to generate 1.66 times more return on investment than Chang Type. However, Elite Material is 1.66 times more volatile than Chang Type Industrial. It trades about 0.1 of its potential returns per unit of risk. Chang Type Industrial is currently generating about -0.02 per unit of risk. If you would invest 18,450 in Elite Material Co on October 30, 2024 and sell it today you would earn a total of 42,950 from holding Elite Material Co or generate 232.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elite Material Co vs. Chang Type Industrial
Performance |
| Timeline |
| Elite Material |
| Chang Type Industrial |
Elite Material and Chang Type Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elite Material and Chang Type
The main advantage of trading using opposite Elite Material and Chang Type positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Material position performs unexpectedly, Chang Type 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 Chang Type will offset losses from the drop in Chang Type's long position.| Elite Material vs. Unimicron Technology Corp | Elite Material vs. Kinsus Interconnect Technology | Elite Material vs. Novatek Microelectronics Corp | Elite Material vs. Delta Electronics |
| Chang Type vs. Tong Yang Industry | Chang Type vs. Ta Yih Industrial | Chang Type vs. Basso Industry Corp | Chang Type vs. China Motor 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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