Correlation Between Chang Hwa and Zinwell
Can any of the company-specific risk be diversified away by investing in both Chang Hwa and Zinwell 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 Zinwell 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 Zinwell, you can compare the effects of market volatilities on Chang Hwa and Zinwell 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 Zinwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chang Hwa and Zinwell.
Diversification Opportunities for Chang Hwa and Zinwell
Very good diversification
The 3 months correlation between Chang and Zinwell is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Chang Hwa Commercial and Zinwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinwell 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 Zinwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinwell has no effect on the direction of Chang Hwa i.e., Chang Hwa and Zinwell go up and down completely randomly.
Pair Corralation between Chang Hwa and Zinwell
Assuming the 90 days trading horizon Chang Hwa Commercial is expected to under-perform the Zinwell. But the stock apears to be less risky and, when comparing its historical volatility, Chang Hwa Commercial is 4.39 times less risky than Zinwell. The stock trades about -0.1 of its potential returns per unit of risk. The Zinwell is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,490 in Zinwell on November 28, 2024 and sell it today you would earn a total of 50.00 from holding Zinwell or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chang Hwa Commercial vs. Zinwell
Performance |
| Timeline |
| Chang Hwa Commercial |
| Zinwell |
Chang Hwa and Zinwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chang Hwa and Zinwell
The main advantage of trading using opposite Chang Hwa and Zinwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chang Hwa position performs unexpectedly, Zinwell 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 Zinwell will offset losses from the drop in Zinwell's long position.| Chang Hwa vs. Hua Nan Financial | Chang Hwa vs. First Financial Holding | Chang Hwa vs. Sinopac Financial Holdings | Chang Hwa vs. Taishin Financial Holding |
| Zinwell vs. Clevo Co | Zinwell vs. D Link Corp | Zinwell vs. Cheng Uei Precision | Zinwell vs. Senao International Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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