Correlation Between Infortrend Technology and Chenming Mold
Can any of the company-specific risk be diversified away by investing in both Infortrend Technology and Chenming Mold 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 Infortrend Technology and Chenming Mold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infortrend Technology and Chenming Mold Industrial, you can compare the effects of market volatilities on Infortrend Technology and Chenming Mold 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 Infortrend Technology with a short position of Chenming Mold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infortrend Technology and Chenming Mold.
Diversification Opportunities for Infortrend Technology and Chenming Mold
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Infortrend and Chenming is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Infortrend Technology and Chenming Mold Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chenming Mold Industrial and Infortrend 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 Infortrend Technology are associated (or correlated) with Chenming Mold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chenming Mold Industrial has no effect on the direction of Infortrend Technology i.e., Infortrend Technology and Chenming Mold go up and down completely randomly.
Pair Corralation between Infortrend Technology and Chenming Mold
Assuming the 90 days trading horizon Infortrend Technology is expected to generate 0.96 times more return on investment than Chenming Mold. However, Infortrend Technology is 1.05 times less risky than Chenming Mold. It trades about 0.03 of its potential returns per unit of risk. Chenming Mold Industrial is currently generating about -0.08 per unit of risk. If you would invest 3,630 in Infortrend Technology on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Infortrend Technology or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infortrend Technology vs. Chenming Mold Industrial
Performance |
| Timeline |
| Infortrend Technology |
| Chenming Mold Industrial |
Infortrend Technology and Chenming Mold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infortrend Technology and Chenming Mold
The main advantage of trading using opposite Infortrend Technology and Chenming Mold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infortrend Technology position performs unexpectedly, Chenming Mold 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 Chenming Mold will offset losses from the drop in Chenming Mold's long position.The idea behind Infortrend Technology and Chenming Mold Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Chenming Mold vs. Clevo Co | Chenming Mold vs. Zinwell | Chenming Mold vs. Min Aik Technology | Chenming Mold vs. Promise Technology |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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