Correlation Between Chaintech Technology and Tung Ho
Can any of the company-specific risk be diversified away by investing in both Chaintech Technology and Tung Ho 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 Chaintech Technology and Tung Ho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chaintech Technology Corp and Tung Ho Textile, you can compare the effects of market volatilities on Chaintech Technology and Tung Ho 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 Chaintech Technology with a short position of Tung Ho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chaintech Technology and Tung Ho.
Diversification Opportunities for Chaintech Technology and Tung Ho
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chaintech and Tung is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Chaintech Technology Corp and Tung Ho Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tung Ho Textile and Chaintech Technology 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 Chaintech Technology Corp are associated (or correlated) with Tung Ho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tung Ho Textile has no effect on the direction of Chaintech Technology i.e., Chaintech Technology and Tung Ho go up and down completely randomly.
Pair Corralation between Chaintech Technology and Tung Ho
Assuming the 90 days trading horizon Chaintech Technology Corp is expected to under-perform the Tung Ho. In addition to that, Chaintech Technology is 1.62 times more volatile than Tung Ho Textile. It trades about -0.3 of its total potential returns per unit of risk. Tung Ho Textile is currently generating about 0.14 per unit of volatility. If you would invest 2,295 in Tung Ho Textile on September 3, 2024 and sell it today you would earn a total of 80.00 from holding Tung Ho Textile or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chaintech Technology Corp vs. Tung Ho Textile
Performance |
| Timeline |
| Chaintech Technology Corp |
| Tung Ho Textile |
Chaintech Technology and Tung Ho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chaintech Technology and Tung Ho
The main advantage of trading using opposite Chaintech Technology and Tung Ho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chaintech Technology position performs unexpectedly, Tung Ho 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 Tung Ho will offset losses from the drop in Tung Ho's long position.| Chaintech Technology vs. Taiwan Semiconductor Manufacturing | Chaintech Technology vs. Yang Ming Marine | Chaintech Technology vs. ASE Industrial Holding | Chaintech Technology vs. AU Optronics |
| Tung Ho vs. Tainan Spinning Co | Tung Ho vs. Chia Her Industrial | Tung Ho vs. WiseChip Semiconductor | Tung Ho vs. Novatek Microelectronics 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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