Correlation Between Champion Microelectronic and Chiu Ting
Can any of the company-specific risk be diversified away by investing in both Champion Microelectronic and Chiu Ting 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 Champion Microelectronic and Chiu Ting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Microelectronic Corp and Chiu Ting Machinery, you can compare the effects of market volatilities on Champion Microelectronic and Chiu Ting 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 Champion Microelectronic with a short position of Chiu Ting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Microelectronic and Chiu Ting.
Diversification Opportunities for Champion Microelectronic and Chiu Ting
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champion and Chiu is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Champion Microelectronic Corp and Chiu Ting Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiu Ting Machinery and Champion Microelectronic 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 Champion Microelectronic Corp are associated (or correlated) with Chiu Ting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiu Ting Machinery has no effect on the direction of Champion Microelectronic i.e., Champion Microelectronic and Chiu Ting go up and down completely randomly.
Pair Corralation between Champion Microelectronic and Chiu Ting
Assuming the 90 days trading horizon Champion Microelectronic Corp is expected to under-perform the Chiu Ting. But the stock apears to be less risky and, when comparing its historical volatility, Champion Microelectronic Corp is 1.11 times less risky than Chiu Ting. The stock trades about -0.02 of its potential returns per unit of risk. The Chiu Ting Machinery is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,485 in Chiu Ting Machinery on September 2, 2024 and sell it today you would lose (35.00) from holding Chiu Ting Machinery or give up 1.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Microelectronic Corp vs. Chiu Ting Machinery
Performance |
| Timeline |
| Champion Microelectronic |
| Chiu Ting Machinery |
Champion Microelectronic and Chiu Ting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Microelectronic and Chiu Ting
The main advantage of trading using opposite Champion Microelectronic and Chiu Ting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Microelectronic position performs unexpectedly, Chiu Ting 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 Chiu Ting will offset losses from the drop in Chiu Ting's long position.| Champion Microelectronic vs. United Microelectronics | Champion Microelectronic vs. Winbond Electronics Corp |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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