Correlation Between Chaintech Technology and Avision
Can any of the company-specific risk be diversified away by investing in both Chaintech Technology and Avision 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 Avision 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 Avision, you can compare the effects of market volatilities on Chaintech Technology and Avision 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 Avision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chaintech Technology and Avision.
Diversification Opportunities for Chaintech Technology and Avision
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chaintech and Avision is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Chaintech Technology Corp and Avision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avision 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 Avision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avision has no effect on the direction of Chaintech Technology i.e., Chaintech Technology and Avision go up and down completely randomly.
Pair Corralation between Chaintech Technology and Avision
Assuming the 90 days trading horizon Chaintech Technology Corp is expected to generate 1.35 times more return on investment than Avision. However, Chaintech Technology is 1.35 times more volatile than Avision. It trades about 0.01 of its potential returns per unit of risk. Avision is currently generating about -0.08 per unit of risk. If you would invest 3,870 in Chaintech Technology Corp on August 31, 2024 and sell it today you would lose (80.00) from holding Chaintech Technology Corp or give up 2.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chaintech Technology Corp vs. Avision
Performance |
| Timeline |
| Chaintech Technology Corp |
| Avision |
Chaintech Technology and Avision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chaintech Technology and Avision
The main advantage of trading using opposite Chaintech Technology and Avision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chaintech Technology position performs unexpectedly, Avision 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 Avision will offset losses from the drop in Avision'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 |
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 CEOs Directory module to screen CEOs from public companies around the world.
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