Correlation Between Merry Electronics and Chicony Power
Can any of the company-specific risk be diversified away by investing in both Merry Electronics and Chicony Power 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 Merry Electronics and Chicony Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merry Electronics Co and Chicony Power Technology, you can compare the effects of market volatilities on Merry Electronics and Chicony Power 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 Merry Electronics with a short position of Chicony Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merry Electronics and Chicony Power.
Diversification Opportunities for Merry Electronics and Chicony Power
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Merry and Chicony is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Merry Electronics Co and Chicony Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicony Power Technology and Merry Electronics 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 Merry Electronics Co are associated (or correlated) with Chicony Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicony Power Technology has no effect on the direction of Merry Electronics i.e., Merry Electronics and Chicony Power go up and down completely randomly.
Pair Corralation between Merry Electronics and Chicony Power
Assuming the 90 days trading horizon Merry Electronics Co is expected to generate 1.13 times more return on investment than Chicony Power. However, Merry Electronics is 1.13 times more volatile than Chicony Power Technology. It trades about -0.04 of its potential returns per unit of risk. Chicony Power Technology is currently generating about -0.06 per unit of risk. If you would invest 12,400 in Merry Electronics Co on August 29, 2024 and sell it today you would lose (1,950) from holding Merry Electronics Co or give up 15.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merry Electronics Co vs. Chicony Power Technology
Performance |
| Timeline |
| Merry Electronics |
| Chicony Power Technology |
Merry Electronics and Chicony Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merry Electronics and Chicony Power
The main advantage of trading using opposite Merry Electronics and Chicony Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merry Electronics position performs unexpectedly, Chicony Power 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 Chicony Power will offset losses from the drop in Chicony Power's long position.| Merry Electronics vs. Chung Hwa Food | Merry Electronics vs. Oceanic Beverages Co | Merry Electronics vs. Alchip Technologies | Merry Electronics vs. United Radiant Technology |
| Chicony Power vs. Merry Electronics Co | Chicony Power vs. E Lead Electronic Co | Chicony Power vs. Heran Co | Chicony Power vs. Zeng Hsing Industrial |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |