Correlation Between Min Aik and Chung Hwa
Can any of the company-specific risk be diversified away by investing in both Min Aik and Chung Hwa 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 Min Aik and Chung Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Min Aik Technology and Chung Hwa Food, you can compare the effects of market volatilities on Min Aik and Chung Hwa 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 Min Aik with a short position of Chung Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Min Aik and Chung Hwa.
Diversification Opportunities for Min Aik and Chung Hwa
Significant diversification
The 3 months correlation between Min and Chung is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Min Aik Technology and Chung Hwa Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chung Hwa Food and Min Aik 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 Min Aik Technology are associated (or correlated) with Chung Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chung Hwa Food has no effect on the direction of Min Aik i.e., Min Aik and Chung Hwa go up and down completely randomly.
Pair Corralation between Min Aik and Chung Hwa
Assuming the 90 days trading horizon Min Aik Technology is expected to under-perform the Chung Hwa. In addition to that, Min Aik is 4.97 times more volatile than Chung Hwa Food. It trades about -0.05 of its total potential returns per unit of risk. Chung Hwa Food is currently generating about -0.02 per unit of volatility. If you would invest 9,198 in Chung Hwa Food on November 28, 2024 and sell it today you would lose (218.00) from holding Chung Hwa Food or give up 2.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Min Aik Technology vs. Chung Hwa Food
Performance |
| Timeline |
| Min Aik Technology |
| Chung Hwa Food |
Min Aik and Chung Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Min Aik and Chung Hwa
The main advantage of trading using opposite Min Aik and Chung Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Min Aik position performs unexpectedly, Chung Hwa 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 Chung Hwa will offset losses from the drop in Chung Hwa's long position.| Min Aik vs. Promise Technology | Min Aik vs. Spirox Corp | Min Aik vs. Zinwell | Min Aik vs. Gigastorage Corp |
| Chung Hwa vs. Bright Led Electronics | Chung Hwa vs. Chun Yuan Steel | Chung Hwa vs. Shian Yih Electronic | Chung Hwa vs. Wei Chih Steel |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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