Correlation Between Greatek Electronics and Chong Hong
Can any of the company-specific risk be diversified away by investing in both Greatek Electronics and Chong Hong 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 Greatek Electronics and Chong Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatek Electronics and Chong Hong Construction, you can compare the effects of market volatilities on Greatek Electronics and Chong Hong 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 Greatek Electronics with a short position of Chong Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatek Electronics and Chong Hong.
Diversification Opportunities for Greatek Electronics and Chong Hong
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Greatek and Chong is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Greatek Electronics and Chong Hong Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chong Hong Construction and Greatek 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 Greatek Electronics are associated (or correlated) with Chong Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chong Hong Construction has no effect on the direction of Greatek Electronics i.e., Greatek Electronics and Chong Hong go up and down completely randomly.
Pair Corralation between Greatek Electronics and Chong Hong
Assuming the 90 days trading horizon Greatek Electronics is expected to generate 0.69 times more return on investment than Chong Hong. However, Greatek Electronics is 1.45 times less risky than Chong Hong. It trades about 0.32 of its potential returns per unit of risk. Chong Hong Construction is currently generating about -0.1 per unit of risk. If you would invest 5,870 in Greatek Electronics on October 25, 2024 and sell it today you would earn a total of 330.00 from holding Greatek Electronics or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greatek Electronics vs. Chong Hong Construction
Performance |
| Timeline |
| Greatek Electronics |
| Chong Hong Construction |
Greatek Electronics and Chong Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatek Electronics and Chong Hong
The main advantage of trading using opposite Greatek Electronics and Chong Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatek Electronics position performs unexpectedly, Chong Hong 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 Chong Hong will offset losses from the drop in Chong Hong's long position.| Greatek Electronics vs. King Yuan Electronics | Greatek Electronics vs. Powertech Technology | Greatek Electronics vs. Realtek Semiconductor Corp | Greatek Electronics vs. Elan Microelectronics Corp |
| Chong Hong vs. Shining Building Business | Chong Hong vs. Farglory Land Development | Chong Hong vs. Sweeten Real Estate | Chong Hong vs. Hung Ching Development |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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