Correlation Between Chaintech Technology and I Hwa
Can any of the company-specific risk be diversified away by investing in both Chaintech Technology and I Hwa 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 I Hwa 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 I Hwa Industrial Co, you can compare the effects of market volatilities on Chaintech Technology and I Hwa 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 I Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chaintech Technology and I Hwa.
Diversification Opportunities for Chaintech Technology and I Hwa
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chaintech and 1456 is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Chaintech Technology Corp and I Hwa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Hwa Industrial 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 I Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Hwa Industrial has no effect on the direction of Chaintech Technology i.e., Chaintech Technology and I Hwa go up and down completely randomly.
Pair Corralation between Chaintech Technology and I Hwa
Assuming the 90 days trading horizon Chaintech Technology Corp is expected to under-perform the I Hwa. But the stock apears to be less risky and, when comparing its historical volatility, Chaintech Technology Corp is 1.0 times less risky than I Hwa. The stock trades about -0.3 of its potential returns per unit of risk. The I Hwa Industrial Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,780 in I Hwa Industrial Co on September 3, 2024 and sell it today you would lose (10.00) from holding I Hwa Industrial Co or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chaintech Technology Corp vs. I Hwa Industrial Co
Performance |
| Timeline |
| Chaintech Technology Corp |
| I Hwa Industrial |
Chaintech Technology and I Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chaintech Technology and I Hwa
The main advantage of trading using opposite Chaintech Technology and I Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chaintech Technology position performs unexpectedly, I Hwa 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 I Hwa will offset losses from the drop in I Hwa'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 |
| I Hwa vs. Tainan Spinning Co | I Hwa vs. Chia Her Industrial | I Hwa vs. WiseChip Semiconductor | I Hwa 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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