Correlation Between Huaku Development and Chailease Holding
Can any of the company-specific risk be diversified away by investing in both Huaku Development and Chailease Holding 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 Huaku Development and Chailease Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huaku Development Co and Chailease Holding Co, you can compare the effects of market volatilities on Huaku Development and Chailease Holding 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 Huaku Development with a short position of Chailease Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaku Development and Chailease Holding.
Diversification Opportunities for Huaku Development and Chailease Holding
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Huaku and Chailease is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Huaku Development Co and Chailease Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chailease Holding and Huaku Development 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 Huaku Development Co are associated (or correlated) with Chailease Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chailease Holding has no effect on the direction of Huaku Development i.e., Huaku Development and Chailease Holding go up and down completely randomly.
Pair Corralation between Huaku Development and Chailease Holding
Assuming the 90 days trading horizon Huaku Development Co is expected to generate 0.97 times more return on investment than Chailease Holding. However, Huaku Development Co is 1.03 times less risky than Chailease Holding. It trades about 0.05 of its potential returns per unit of risk. Chailease Holding Co is currently generating about -0.4 per unit of risk. If you would invest 11,800 in Huaku Development Co on August 31, 2024 and sell it today you would earn a total of 250.00 from holding Huaku Development Co or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huaku Development Co vs. Chailease Holding Co
Performance |
| Timeline |
| Huaku Development |
| Chailease Holding |
Huaku Development and Chailease Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huaku Development and Chailease Holding
The main advantage of trading using opposite Huaku Development and Chailease Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaku Development position performs unexpectedly, Chailease Holding 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 Chailease Holding will offset losses from the drop in Chailease Holding's long position.| Huaku Development vs. Ruentex Development Co | Huaku Development vs. CTCI Corp | Huaku Development vs. Information Technology Total | Huaku Development vs. Ennoconn Corp |
| Chailease Holding vs. Central Reinsurance Corp | Chailease Holding vs. Huaku Development Co | Chailease Holding vs. Fubon Financial Holding | Chailease Holding vs. CTBC Financial Holding |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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