Correlation Between Chunghwa Telecom and Adimmune Corp
Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom and Adimmune Corp 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 Adimmune Corp 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 Adimmune Corp, you can compare the effects of market volatilities on Chunghwa Telecom and Adimmune Corp 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 Adimmune Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and Adimmune Corp.
Diversification Opportunities for Chunghwa Telecom and Adimmune Corp
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chunghwa and Adimmune is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and Adimmune Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adimmune Corp 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 Adimmune Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adimmune Corp has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and Adimmune Corp go up and down completely randomly.
Pair Corralation between Chunghwa Telecom and Adimmune Corp
Assuming the 90 days trading horizon Chunghwa Telecom Co is expected to generate 0.43 times more return on investment than Adimmune Corp. However, Chunghwa Telecom Co is 2.3 times less risky than Adimmune Corp. It trades about 0.02 of its potential returns per unit of risk. Adimmune Corp is currently generating about -0.11 per unit of risk. If you would invest 12,000 in Chunghwa Telecom Co on September 4, 2024 and sell it today you would earn a total of 300.00 from holding Chunghwa Telecom Co or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chunghwa Telecom Co vs. Adimmune Corp
Performance |
| Timeline |
| Chunghwa Telecom |
| Adimmune Corp |
Chunghwa Telecom and Adimmune Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Telecom and Adimmune Corp
The main advantage of trading using opposite Chunghwa Telecom and Adimmune Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Telecom position performs unexpectedly, Adimmune Corp 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 Adimmune Corp will offset losses from the drop in Adimmune Corp's long position.| Chunghwa Telecom vs. China Steel Corp | Chunghwa Telecom vs. Formosa Plastics Corp | Chunghwa Telecom vs. Cathay Financial Holding | Chunghwa Telecom vs. Fubon Financial Holding |
| Adimmune Corp vs. Medigen Vaccine Biologics | Adimmune Corp vs. SCI Pharmtech | Adimmune Corp vs. Chunghwa Chemical Synthesis | Adimmune Corp vs. ScinoPharm Taiwan |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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