Correlation Between Chicony Electronics and Chroma ATE
Can any of the company-specific risk be diversified away by investing in both Chicony Electronics and Chroma ATE 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 Chicony Electronics and Chroma ATE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chicony Electronics Co and Chroma ATE, you can compare the effects of market volatilities on Chicony Electronics and Chroma ATE 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 Chicony Electronics with a short position of Chroma ATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Electronics and Chroma ATE.
Diversification Opportunities for Chicony Electronics and Chroma ATE
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chicony and Chroma is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Electronics Co and Chroma ATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chroma ATE and Chicony Electronics 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 Chicony Electronics Co are associated (or correlated) with Chroma ATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chroma ATE has no effect on the direction of Chicony Electronics i.e., Chicony Electronics and Chroma ATE go up and down completely randomly.
Pair Corralation between Chicony Electronics and Chroma ATE
Assuming the 90 days trading horizon Chicony Electronics is expected to generate 1.44 times less return on investment than Chroma ATE. But when comparing it to its historical volatility, Chicony Electronics Co is 1.38 times less risky than Chroma ATE. It trades about 0.08 of its potential returns per unit of risk. Chroma ATE is currently generating about 0.08 of returns per unit of risk over similar time horizon. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chicony Electronics Co vs. Chroma ATE
Performance |
| Timeline |
| Chicony Electronics |
| Chroma ATE |
Chicony Electronics and Chroma ATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicony Electronics and Chroma ATE
The main advantage of trading using opposite Chicony Electronics and Chroma ATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Electronics position performs unexpectedly, Chroma ATE 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 Chroma ATE will offset losses from the drop in Chroma ATE's long position.| Chicony Electronics vs. Lite On Technology Corp | Chicony Electronics vs. Inventec Corp | Chicony Electronics vs. Compal Electronics | Chicony Electronics vs. Synnex Technology International |
| Chroma ATE vs. Accton Technology Corp | Chroma ATE vs. Delta Electronics | Chroma ATE vs. Chicony Electronics Co | Chroma ATE vs. Advantech 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |