Correlation Between Chaintech Technology and Biostar Microtech
Can any of the company-specific risk be diversified away by investing in both Chaintech Technology and Biostar Microtech 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 Biostar Microtech 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 Biostar Microtech International, you can compare the effects of market volatilities on Chaintech Technology and Biostar Microtech 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 Biostar Microtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chaintech Technology and Biostar Microtech.
Diversification Opportunities for Chaintech Technology and Biostar Microtech
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chaintech and Biostar is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chaintech Technology Corp and Biostar Microtech Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biostar Microtech 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 Biostar Microtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biostar Microtech has no effect on the direction of Chaintech Technology i.e., Chaintech Technology and Biostar Microtech go up and down completely randomly.
Pair Corralation between Chaintech Technology and Biostar Microtech
Assuming the 90 days trading horizon Chaintech Technology Corp is expected to under-perform the Biostar Microtech. But the stock apears to be less risky and, when comparing its historical volatility, Chaintech Technology Corp is 1.12 times less risky than Biostar Microtech. The stock trades about -0.02 of its potential returns per unit of risk. The Biostar Microtech International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,310 in Biostar Microtech International on August 30, 2024 and sell it today you would earn a total of 635.00 from holding Biostar Microtech International or generate 27.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chaintech Technology Corp vs. Biostar Microtech Internationa
Performance |
| Timeline |
| Chaintech Technology Corp |
| Biostar Microtech |
Chaintech Technology and Biostar Microtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chaintech Technology and Biostar Microtech
The main advantage of trading using opposite Chaintech Technology and Biostar Microtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chaintech Technology position performs unexpectedly, Biostar Microtech 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 Biostar Microtech will offset losses from the drop in Biostar Microtech'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 |
| Biostar Microtech vs. Elitegroup Computer Systems | Biostar Microtech vs. Gigabyte Technology Co | Biostar Microtech vs. Micro Star International Co | Biostar Microtech vs. Shuttle |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |