Correlation Between Chunghwa Telecom and Leatec Fine
Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom and Leatec Fine 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 Leatec Fine 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 Leatec Fine Ceramics, you can compare the effects of market volatilities on Chunghwa Telecom and Leatec Fine 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 Leatec Fine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and Leatec Fine.
Diversification Opportunities for Chunghwa Telecom and Leatec Fine
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chunghwa and Leatec is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and Leatec Fine Ceramics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leatec Fine Ceramics 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 Leatec Fine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leatec Fine Ceramics has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and Leatec Fine go up and down completely randomly.
Pair Corralation between Chunghwa Telecom and Leatec Fine
Assuming the 90 days trading horizon Chunghwa Telecom Co is expected to generate 0.19 times more return on investment than Leatec Fine. However, Chunghwa Telecom Co is 5.2 times less risky than Leatec Fine. It trades about 0.05 of its potential returns per unit of risk. Leatec Fine Ceramics is currently generating about -0.05 per unit of risk. If you would invest 12,250 in Chunghwa Telecom Co on August 27, 2024 and sell it today you would earn a total of 50.00 from holding Chunghwa Telecom Co or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chunghwa Telecom Co vs. Leatec Fine Ceramics
Performance |
| Timeline |
| Chunghwa Telecom |
| Leatec Fine Ceramics |
Chunghwa Telecom and Leatec Fine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Telecom and Leatec Fine
The main advantage of trading using opposite Chunghwa Telecom and Leatec Fine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Telecom position performs unexpectedly, Leatec Fine 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 Leatec Fine will offset losses from the drop in Leatec Fine's long position.| Chunghwa Telecom vs. CTBC Financial Holding | Chunghwa Telecom vs. Fubon Financial Holding | Chunghwa Telecom vs. President Chain Store |
| Leatec Fine vs. Chiu Ting Machinery | Leatec Fine vs. Great Computer | Leatec Fine vs. Ruentex Engineering Construction | Leatec Fine vs. Sesoda 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |