Correlation Between Cheng Uei and Ichia Technologies
Can any of the company-specific risk be diversified away by investing in both Cheng Uei and Ichia Technologies 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 Cheng Uei and Ichia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheng Uei Precision and Ichia Technologies, you can compare the effects of market volatilities on Cheng Uei and Ichia Technologies 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 Cheng Uei with a short position of Ichia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheng Uei and Ichia Technologies.
Diversification Opportunities for Cheng Uei and Ichia Technologies
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cheng and Ichia is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cheng Uei Precision and Ichia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichia Technologies and Cheng Uei 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 Cheng Uei Precision are associated (or correlated) with Ichia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichia Technologies has no effect on the direction of Cheng Uei i.e., Cheng Uei and Ichia Technologies go up and down completely randomly.
Pair Corralation between Cheng Uei and Ichia Technologies
Assuming the 90 days trading horizon Cheng Uei Precision is expected to generate 1.02 times more return on investment than Ichia Technologies. However, Cheng Uei is 1.02 times more volatile than Ichia Technologies. It trades about 0.09 of its potential returns per unit of risk. Ichia Technologies is currently generating about 0.04 per unit of risk. If you would invest 3,873 in Cheng Uei Precision on August 31, 2024 and sell it today you would earn a total of 4,087 from holding Cheng Uei Precision or generate 105.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Cheng Uei Precision vs. Ichia Technologies
Performance |
| Timeline |
| Cheng Uei Precision |
| Ichia Technologies |
Cheng Uei and Ichia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheng Uei and Ichia Technologies
The main advantage of trading using opposite Cheng Uei and Ichia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheng Uei position performs unexpectedly, Ichia Technologies 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 Ichia Technologies will offset losses from the drop in Ichia Technologies' long position.| Cheng Uei vs. Inventec Corp | Cheng Uei vs. Compal Electronics | Cheng Uei vs. Ichia Technologies | Cheng Uei vs. Pan International Industrial Corp |
| Ichia Technologies vs. Cheng Uei Precision | Ichia Technologies vs. Sunplus Technology Co | Ichia Technologies vs. Merry Electronics Co | Ichia Technologies vs. D Link 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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