Correlation Between Chunghwa Telecom and Min Aik
Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom and Min Aik 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 Chunghwa Telecom and Min Aik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chunghwa Telecom Co and Min Aik Technology, you can compare the effects of market volatilities on Chunghwa Telecom and Min Aik 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 Chunghwa Telecom with a short position of Min Aik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and Min Aik.
Diversification Opportunities for Chunghwa Telecom and Min Aik
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chunghwa and Min is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and Min Aik Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Min Aik Technology and Chunghwa Telecom 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 Chunghwa Telecom Co are associated (or correlated) with Min Aik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Min Aik Technology has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and Min Aik go up and down completely randomly.
Pair Corralation between Chunghwa Telecom and Min Aik
Assuming the 90 days trading horizon Chunghwa Telecom is expected to generate 6.34 times less return on investment than Min Aik. But when comparing it to its historical volatility, Chunghwa Telecom Co is 4.08 times less risky than Min Aik. It trades about 0.03 of its potential returns per unit of risk. Min Aik Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,641 in Min Aik Technology on October 13, 2024 and sell it today you would earn a total of 694.00 from holding Min Aik Technology or generate 42.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Chunghwa Telecom Co vs. Min Aik Technology
Performance |
| Timeline |
| Chunghwa Telecom |
| Min Aik Technology |
Chunghwa Telecom and Min Aik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Telecom and Min Aik
The main advantage of trading using opposite Chunghwa Telecom and Min Aik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Telecom position performs unexpectedly, Min Aik 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 Min Aik will offset losses from the drop in Min Aik's long position.| Chunghwa Telecom vs. Taiwan Mobile Co | Chunghwa Telecom vs. China Steel Corp | Chunghwa Telecom vs. Formosa Plastics Corp | Chunghwa Telecom vs. Cathay Financial Holding |
| Min Aik vs. Promise Technology | Min Aik vs. Spirox Corp | Min Aik vs. Zinwell | Min Aik vs. Gigastorage 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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