Correlation Between Chinese Gamer and PChome Online
Can any of the company-specific risk be diversified away by investing in both Chinese Gamer and PChome Online 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 Chinese Gamer and PChome Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chinese Gamer International and PChome Online, you can compare the effects of market volatilities on Chinese Gamer and PChome Online 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 Chinese Gamer with a short position of PChome Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Gamer and PChome Online.
Diversification Opportunities for Chinese Gamer and PChome Online
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chinese and PChome is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Gamer International and PChome Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PChome Online and Chinese Gamer 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 Chinese Gamer International are associated (or correlated) with PChome Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PChome Online has no effect on the direction of Chinese Gamer i.e., Chinese Gamer and PChome Online go up and down completely randomly.
Pair Corralation between Chinese Gamer and PChome Online
Assuming the 90 days trading horizon Chinese Gamer International is expected to under-perform the PChome Online. But the stock apears to be less risky and, when comparing its historical volatility, Chinese Gamer International is 1.5 times less risky than PChome Online. The stock trades about -0.03 of its potential returns per unit of risk. The PChome Online is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,515 in PChome Online on August 26, 2024 and sell it today you would earn a total of 1,645 from holding PChome Online or generate 46.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chinese Gamer International vs. PChome Online
Performance |
| Timeline |
| Chinese Gamer Intern |
| PChome Online |
Chinese Gamer and PChome Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Gamer and PChome Online
The main advantage of trading using opposite Chinese Gamer and PChome Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Gamer position performs unexpectedly, PChome Online 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 PChome Online will offset losses from the drop in PChome Online's long position.| Chinese Gamer vs. YuantaP shares Taiwan Electronics | Chinese Gamer vs. YuantaP shares Taiwan Mid Cap | Chinese Gamer vs. Fubon MSCI Taiwan | Chinese Gamer vs. YuantaP shares Taiwan Top |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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