Correlation Between Eastern Media and Chang Type
Can any of the company-specific risk be diversified away by investing in both Eastern Media and Chang Type 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 Eastern Media and Chang Type into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Media International and Chang Type Industrial, you can compare the effects of market volatilities on Eastern Media and Chang Type 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 Eastern Media with a short position of Chang Type. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Media and Chang Type.
Diversification Opportunities for Eastern Media and Chang Type
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastern and Chang is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Media International and Chang Type Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chang Type Industrial and Eastern Media 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 Eastern Media International are associated (or correlated) with Chang Type. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chang Type Industrial has no effect on the direction of Eastern Media i.e., Eastern Media and Chang Type go up and down completely randomly.
Pair Corralation between Eastern Media and Chang Type
Assuming the 90 days trading horizon Eastern Media International is expected to under-perform the Chang Type. But the stock apears to be less risky and, when comparing its historical volatility, Eastern Media International is 1.27 times less risky than Chang Type. The stock trades about -0.34 of its potential returns per unit of risk. The Chang Type Industrial is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,770 in Chang Type Industrial on October 9, 2024 and sell it today you would lose (20.00) from holding Chang Type Industrial or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Media International vs. Chang Type Industrial
Performance |
| Timeline |
| Eastern Media Intern |
| Chang Type Industrial |
Eastern Media and Chang Type Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Media and Chang Type
The main advantage of trading using opposite Eastern Media and Chang Type positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Media position performs unexpectedly, Chang Type 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 Chang Type will offset losses from the drop in Chang Type's long position.| Eastern Media vs. Hota Industrial Mfg | Eastern Media vs. Sinbon Electronics Co | Eastern Media vs. Tong Hsing Electronic | Eastern Media vs. Flexium Interconnect |
| Chang Type vs. Central Reinsurance Corp | Chang Type vs. Grand Ocean Retail | Chang Type vs. Asia Metal Industries | Chang Type vs. Mega 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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