Correlation Between Chicony Electronics and King Yuan
Can any of the company-specific risk be diversified away by investing in both Chicony Electronics and King Yuan 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 King Yuan 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 King Yuan Electronics, you can compare the effects of market volatilities on Chicony Electronics and King Yuan 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 King Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Electronics and King Yuan.
Diversification Opportunities for Chicony Electronics and King Yuan
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chicony and King is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Electronics Co and King Yuan Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on King Yuan Electronics 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 King Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of King Yuan Electronics has no effect on the direction of Chicony Electronics i.e., Chicony Electronics and King Yuan go up and down completely randomly.
Pair Corralation between Chicony Electronics and King Yuan
Assuming the 90 days trading horizon Chicony Electronics Co is expected to generate 0.84 times more return on investment than King Yuan. However, Chicony Electronics Co is 1.19 times less risky than King Yuan. It trades about -0.04 of its potential returns per unit of risk. King Yuan Electronics is currently generating about -0.04 per unit of risk. If you would invest 16,050 in Chicony Electronics Co on August 29, 2024 and sell it today you would lose (350.00) from holding Chicony Electronics Co or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chicony Electronics Co vs. King Yuan Electronics
Performance |
| Timeline |
| Chicony Electronics |
| King Yuan Electronics |
Chicony Electronics and King Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicony Electronics and King Yuan
The main advantage of trading using opposite Chicony Electronics and King Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Electronics position performs unexpectedly, King Yuan 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 King Yuan will offset losses from the drop in King Yuan'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 |
| King Yuan vs. Powertech Technology | King Yuan vs. Novatek Microelectronics Corp | King Yuan vs. Greatek Electronics | King Yuan vs. Nanya Technology 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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