Correlation Between Newretail and Chi Sheng
Can any of the company-specific risk be diversified away by investing in both Newretail and Chi Sheng 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 Newretail and Chi Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newretail Co and Chi Sheng Chemical, you can compare the effects of market volatilities on Newretail and Chi Sheng 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 Newretail with a short position of Chi Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newretail and Chi Sheng.
Diversification Opportunities for Newretail and Chi Sheng
Poor diversification
The 3 months correlation between Newretail and Chi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Newretail Co and Chi Sheng Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chi Sheng Chemical and Newretail 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 Newretail Co are associated (or correlated) with Chi Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chi Sheng Chemical has no effect on the direction of Newretail i.e., Newretail and Chi Sheng go up and down completely randomly.
Pair Corralation between Newretail and Chi Sheng
Assuming the 90 days trading horizon Newretail Co is expected to generate 2.81 times more return on investment than Chi Sheng. However, Newretail is 2.81 times more volatile than Chi Sheng Chemical. It trades about 0.02 of its potential returns per unit of risk. Chi Sheng Chemical is currently generating about 0.01 per unit of risk. If you would invest 2,200 in Newretail Co on October 28, 2024 and sell it today you would earn a total of 120.00 from holding Newretail Co or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newretail Co vs. Chi Sheng Chemical
Performance |
| Timeline |
| Newretail |
| Chi Sheng Chemical |
Newretail and Chi Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newretail and Chi Sheng
The main advantage of trading using opposite Newretail and Chi Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newretail position performs unexpectedly, Chi Sheng 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 Chi Sheng will offset losses from the drop in Chi Sheng's long position.| Newretail vs. Compal Electronics | Newretail vs. C Media Electronics | Newretail vs. Posiflex Technology | Newretail vs. ANJI Technology Co |
| Chi Sheng vs. Pegavision | Chi Sheng vs. StShine Optical Co | Chi Sheng vs. Bioteque | Chi Sheng vs. Medeon Biodesign |
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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