Correlation Between ESUN Financial and Chenbro Micom
Can any of the company-specific risk be diversified away by investing in both ESUN Financial and Chenbro Micom 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 ESUN Financial and Chenbro Micom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESUN Financial Holding and Chenbro Micom Co, you can compare the effects of market volatilities on ESUN Financial and Chenbro Micom 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 ESUN Financial with a short position of Chenbro Micom. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESUN Financial and Chenbro Micom.
Diversification Opportunities for ESUN Financial and Chenbro Micom
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ESUN and Chenbro is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding ESUN Financial Holding and Chenbro Micom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chenbro Micom and ESUN Financial 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 ESUN Financial Holding are associated (or correlated) with Chenbro Micom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chenbro Micom has no effect on the direction of ESUN Financial i.e., ESUN Financial and Chenbro Micom go up and down completely randomly.
Pair Corralation between ESUN Financial and Chenbro Micom
Assuming the 90 days trading horizon ESUN Financial Holding is expected to generate 0.42 times more return on investment than Chenbro Micom. However, ESUN Financial Holding is 2.39 times less risky than Chenbro Micom. It trades about -0.03 of its potential returns per unit of risk. Chenbro Micom Co is currently generating about -0.02 per unit of risk. If you would invest 2,860 in ESUN Financial Holding on September 1, 2024 and sell it today you would lose (160.00) from holding ESUN Financial Holding or give up 5.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
ESUN Financial Holding vs. Chenbro Micom Co
Performance |
| Timeline |
| ESUN Financial Holding |
| Chenbro Micom |
ESUN Financial and Chenbro Micom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESUN Financial and Chenbro Micom
The main advantage of trading using opposite ESUN Financial and Chenbro Micom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESUN Financial position performs unexpectedly, Chenbro Micom 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 Chenbro Micom will offset losses from the drop in Chenbro Micom's long position.| ESUN Financial vs. Mega Financial Holding | ESUN Financial vs. CTBC Financial Holding | ESUN Financial vs. First Financial Holding | ESUN Financial vs. Fubon Financial Holding |
| Chenbro Micom vs. Getac Technology Corp | Chenbro Micom vs. ASRock Inc | Chenbro Micom vs. Elite Material Co | Chenbro Micom vs. Topco Scientific 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |