Correlation Between Chunghwa Telecom and Macroblock
Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom and Macroblock 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 Macroblock 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 Macroblock, you can compare the effects of market volatilities on Chunghwa Telecom and Macroblock 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 Macroblock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and Macroblock.
Diversification Opportunities for Chunghwa Telecom and Macroblock
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chunghwa and Macroblock is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and Macroblock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macroblock 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 Macroblock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macroblock has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and Macroblock go up and down completely randomly.
Pair Corralation between Chunghwa Telecom and Macroblock
Assuming the 90 days trading horizon Chunghwa Telecom Co is expected to generate 0.4 times more return on investment than Macroblock. However, Chunghwa Telecom Co is 2.5 times less risky than Macroblock. It trades about 0.03 of its potential returns per unit of risk. Macroblock is currently generating about -0.1 per unit of risk. If you would invest 11,850 in Chunghwa Telecom Co on September 12, 2024 and sell it today you would earn a total of 500.00 from holding Chunghwa Telecom Co or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chunghwa Telecom Co vs. Macroblock
Performance |
| Timeline |
| Chunghwa Telecom |
| Macroblock |
Chunghwa Telecom and Macroblock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Telecom and Macroblock
The main advantage of trading using opposite Chunghwa Telecom and Macroblock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Telecom position performs unexpectedly, Macroblock 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 Macroblock will offset losses from the drop in Macroblock's long position.| Chunghwa Telecom vs. Cheng Mei Materials | Chunghwa Telecom vs. Lemtech Holdings Co | Chunghwa Telecom vs. Chia Chang Co | Chunghwa Telecom vs. Ruentex Development Co |
| Macroblock vs. WIN Semiconductors | Macroblock vs. GlobalWafers Co | Macroblock vs. Novatek Microelectronics Corp | Macroblock vs. Ruentex Development 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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