Correlation Between Chaintech Technology and Sanyang
Can any of the company-specific risk be diversified away by investing in both Chaintech Technology and Sanyang 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 Sanyang 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 Sanyang Motor Co, you can compare the effects of market volatilities on Chaintech Technology and Sanyang 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 Sanyang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chaintech Technology and Sanyang.
Diversification Opportunities for Chaintech Technology and Sanyang
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chaintech and Sanyang is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Chaintech Technology Corp and Sanyang Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanyang Motor 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 Sanyang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanyang Motor has no effect on the direction of Chaintech Technology i.e., Chaintech Technology and Sanyang go up and down completely randomly.
Pair Corralation between Chaintech Technology and Sanyang
Assuming the 90 days trading horizon Chaintech Technology Corp is expected to generate 1.41 times more return on investment than Sanyang. However, Chaintech Technology is 1.41 times more volatile than Sanyang Motor Co. It trades about 0.04 of its potential returns per unit of risk. Sanyang Motor Co is currently generating about 0.04 per unit of risk. If you would invest 2,890 in Chaintech Technology Corp on August 31, 2024 and sell it today you would earn a total of 895.00 from holding Chaintech Technology Corp or generate 30.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.49% |
| Values | Daily Returns |
Chaintech Technology Corp vs. Sanyang Motor Co
Performance |
| Timeline |
| Chaintech Technology Corp |
| Sanyang Motor |
Chaintech Technology and Sanyang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chaintech Technology and Sanyang
The main advantage of trading using opposite Chaintech Technology and Sanyang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chaintech Technology position performs unexpectedly, Sanyang 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 Sanyang will offset losses from the drop in Sanyang's long position.| Chaintech Technology vs. Biostar Microtech International | Chaintech Technology vs. Elitegroup Computer Systems | Chaintech Technology vs. Shuttle | Chaintech Technology vs. Gigabyte Technology Co |
| Sanyang vs. Chaintech Technology Corp | Sanyang vs. AVerMedia Technologies | Sanyang vs. Avision | Sanyang vs. Clevo 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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