Correlation Between Champion Microelectronic and Continental Holdings
Can any of the company-specific risk be diversified away by investing in both Champion Microelectronic and Continental Holdings 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 Continental Holdings 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 Continental Holdings Corp, you can compare the effects of market volatilities on Champion Microelectronic and Continental Holdings 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 Continental Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Microelectronic and Continental Holdings.
Diversification Opportunities for Champion Microelectronic and Continental Holdings
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Champion and Continental is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Champion Microelectronic Corp and Continental Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Holdings Corp 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 Continental Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Holdings Corp has no effect on the direction of Champion Microelectronic i.e., Champion Microelectronic and Continental Holdings go up and down completely randomly.
Pair Corralation between Champion Microelectronic and Continental Holdings
Assuming the 90 days trading horizon Champion Microelectronic Corp is expected to generate 1.27 times more return on investment than Continental Holdings. However, Champion Microelectronic is 1.27 times more volatile than Continental Holdings Corp. It trades about 0.03 of its potential returns per unit of risk. Continental Holdings Corp is currently generating about -0.06 per unit of risk. If you would invest 6,250 in Champion Microelectronic Corp on September 3, 2024 and sell it today you would earn a total of 390.00 from holding Champion Microelectronic Corp or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Microelectronic Corp vs. Continental Holdings Corp
Performance |
| Timeline |
| Champion Microelectronic |
| Continental Holdings Corp |
Champion Microelectronic and Continental Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Microelectronic and Continental Holdings
The main advantage of trading using opposite Champion Microelectronic and Continental Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Microelectronic position performs unexpectedly, Continental Holdings 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 Continental Holdings will offset losses from the drop in Continental Holdings' long position.| Champion Microelectronic vs. Nuvoton Technology Corp | Champion Microelectronic vs. Generalplus Technology | Champion Microelectronic vs. Holtek Semiconductor | Champion Microelectronic vs. Scientech Corp |
| Continental Holdings vs. BES Engineering Co | Continental Holdings vs. Chien Kuo Construction | Continental Holdings vs. Hung Sheng Construction | Continental Holdings vs. YungShin Global Holding |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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