Correlation Between Chang Hwa and Mirle Automation
Can any of the company-specific risk be diversified away by investing in both Chang Hwa and Mirle Automation 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 Chang Hwa and Mirle Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chang Hwa Commercial and Mirle Automation Corp, you can compare the effects of market volatilities on Chang Hwa and Mirle Automation 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 Chang Hwa with a short position of Mirle Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chang Hwa and Mirle Automation.
Diversification Opportunities for Chang Hwa and Mirle Automation
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chang and Mirle is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Chang Hwa Commercial and Mirle Automation Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirle Automation Corp and Chang Hwa 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 Chang Hwa Commercial are associated (or correlated) with Mirle Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirle Automation Corp has no effect on the direction of Chang Hwa i.e., Chang Hwa and Mirle Automation go up and down completely randomly.
Pair Corralation between Chang Hwa and Mirle Automation
Assuming the 90 days trading horizon Chang Hwa Commercial is expected to generate 0.25 times more return on investment than Mirle Automation. However, Chang Hwa Commercial is 4.07 times less risky than Mirle Automation. It trades about -0.05 of its potential returns per unit of risk. Mirle Automation Corp is currently generating about -0.03 per unit of risk. If you would invest 1,770 in Chang Hwa Commercial on September 1, 2024 and sell it today you would lose (10.00) from holding Chang Hwa Commercial or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chang Hwa Commercial vs. Mirle Automation Corp
Performance |
| Timeline |
| Chang Hwa Commercial |
| Mirle Automation Corp |
Chang Hwa and Mirle Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chang Hwa and Mirle Automation
The main advantage of trading using opposite Chang Hwa and Mirle Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chang Hwa position performs unexpectedly, Mirle Automation 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 Mirle Automation will offset losses from the drop in Mirle Automation's long position.| Chang Hwa vs. Central Reinsurance Corp | Chang Hwa vs. Huaku Development Co | Chang Hwa vs. Fubon Financial Holding |
| Mirle Automation vs. BES Engineering Co | Mirle Automation vs. Continental Holdings Corp | Mirle Automation vs. Kee Tai Properties | Mirle Automation vs. Hung Sheng Construction |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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