Correlation Between King Yuan and Chicony Electronics
Can any of the company-specific risk be diversified away by investing in both King Yuan and Chicony Electronics 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 King Yuan and Chicony Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between King Yuan Electronics and Chicony Electronics Co, you can compare the effects of market volatilities on King Yuan and Chicony Electronics 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 King Yuan with a short position of Chicony Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of King Yuan and Chicony Electronics.
Diversification Opportunities for King Yuan and Chicony Electronics
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between King and Chicony is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding King Yuan Electronics and Chicony Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicony Electronics and King Yuan 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 King Yuan Electronics are associated (or correlated) with Chicony Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicony Electronics has no effect on the direction of King Yuan i.e., King Yuan and Chicony Electronics go up and down completely randomly.
Pair Corralation between King Yuan and Chicony Electronics
Assuming the 90 days trading horizon King Yuan Electronics is expected to generate 1.36 times more return on investment than Chicony Electronics. However, King Yuan is 1.36 times more volatile than Chicony Electronics Co. It trades about 0.08 of its potential returns per unit of risk. Chicony Electronics Co is currently generating about 0.05 per unit of risk. If you would invest 5,420 in King Yuan Electronics on October 24, 2024 and sell it today you would earn a total of 5,930 from holding King Yuan Electronics or generate 109.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
King Yuan Electronics vs. Chicony Electronics Co
Performance |
| Timeline |
| King Yuan Electronics |
| Chicony Electronics |
King Yuan and Chicony Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with King Yuan and Chicony Electronics
The main advantage of trading using opposite King Yuan and Chicony Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if King Yuan position performs unexpectedly, Chicony Electronics 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 Electronics will offset losses from the drop in Chicony Electronics' long position.| King Yuan vs. Powertech Technology | King Yuan vs. Novatek Microelectronics Corp | King Yuan vs. Greatek Electronics | King Yuan vs. Nanya Technology Corp |
| Chicony Electronics vs. Lite On Technology Corp | Chicony Electronics vs. Inventec Corp | Chicony Electronics vs. Compal Electronics | Chicony Electronics vs. Synnex Technology International |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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