Correlation Between Chateau International and Chaintech Technology
Can any of the company-specific risk be diversified away by investing in both Chateau International and Chaintech Technology 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 Chateau International and Chaintech Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chateau International Development and Chaintech Technology Corp, you can compare the effects of market volatilities on Chateau International and Chaintech Technology 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 Chateau International with a short position of Chaintech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chateau International and Chaintech Technology.
Diversification Opportunities for Chateau International and Chaintech Technology
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chateau and Chaintech is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Chateau International Developm and Chaintech Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chaintech Technology Corp and Chateau International 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 Chateau International Development are associated (or correlated) with Chaintech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chaintech Technology Corp has no effect on the direction of Chateau International i.e., Chateau International and Chaintech Technology go up and down completely randomly.
Pair Corralation between Chateau International and Chaintech Technology
Assuming the 90 days trading horizon Chateau International is expected to generate 2.51 times less return on investment than Chaintech Technology. In addition to that, Chateau International is 1.15 times more volatile than Chaintech Technology Corp. It trades about 0.01 of its total potential returns per unit of risk. Chaintech Technology Corp is currently generating about 0.04 per unit of volatility. If you would invest 2,845 in Chaintech Technology Corp on September 3, 2024 and sell it today you would earn a total of 945.00 from holding Chaintech Technology Corp or generate 33.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chateau International Developm vs. Chaintech Technology Corp
Performance |
| Timeline |
| Chateau International |
| Chaintech Technology Corp |
Chateau International and Chaintech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chateau International and Chaintech Technology
The main advantage of trading using opposite Chateau International and Chaintech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chateau International position performs unexpectedly, Chaintech Technology 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 Chaintech Technology will offset losses from the drop in Chaintech Technology's long position.| Chateau International vs. Tainan Spinning Co | Chateau International vs. Chia Her Industrial | Chateau International vs. WiseChip Semiconductor | Chateau International vs. Novatek Microelectronics Corp |
| Chaintech Technology vs. Taiwan Semiconductor Manufacturing | Chaintech Technology vs. Yang Ming Marine | Chaintech Technology vs. ASE Industrial Holding | Chaintech Technology vs. AU Optronics |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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