Correlation Between Novatek Microelectronics and Chia Her
Can any of the company-specific risk be diversified away by investing in both Novatek Microelectronics and Chia Her 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 Novatek Microelectronics and Chia Her into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novatek Microelectronics Corp and Chia Her Industrial, you can compare the effects of market volatilities on Novatek Microelectronics and Chia Her 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 Novatek Microelectronics with a short position of Chia Her. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novatek Microelectronics and Chia Her.
Diversification Opportunities for Novatek Microelectronics and Chia Her
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Novatek and Chia is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Novatek Microelectronics Corp and Chia Her Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chia Her Industrial and Novatek Microelectronics 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 Novatek Microelectronics Corp are associated (or correlated) with Chia Her. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chia Her Industrial has no effect on the direction of Novatek Microelectronics i.e., Novatek Microelectronics and Chia Her go up and down completely randomly.
Pair Corralation between Novatek Microelectronics and Chia Her
Assuming the 90 days trading horizon Novatek Microelectronics Corp is expected to under-perform the Chia Her. But the stock apears to be less risky and, when comparing its historical volatility, Novatek Microelectronics Corp is 3.47 times less risky than Chia Her. The stock trades about -0.05 of its potential returns per unit of risk. The Chia Her Industrial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,260 in Chia Her Industrial on September 4, 2024 and sell it today you would earn a total of 140.00 from holding Chia Her Industrial or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novatek Microelectronics Corp vs. Chia Her Industrial
Performance |
| Timeline |
| Novatek Microelectronics |
| Chia Her Industrial |
Novatek Microelectronics and Chia Her Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novatek Microelectronics and Chia Her
The main advantage of trading using opposite Novatek Microelectronics and Chia Her positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novatek Microelectronics position performs unexpectedly, Chia Her 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 Chia Her will offset losses from the drop in Chia Her's long position.The idea behind Novatek Microelectronics Corp and Chia Her Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Chia Her vs. Carnival Industrial Corp | Chia Her vs. I Hwa Industrial Co | Chia Her vs. Hung Chou Fiber | Chia Her vs. Tung Ho Textile |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |