Correlation Between Integrated Service and Chung Fu
Can any of the company-specific risk be diversified away by investing in both Integrated Service and Chung Fu 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 Integrated Service and Chung Fu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Service Technology and Chung Fu Tex International, you can compare the effects of market volatilities on Integrated Service and Chung Fu 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 Integrated Service with a short position of Chung Fu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Service and Chung Fu.
Diversification Opportunities for Integrated Service and Chung Fu
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Integrated and Chung is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Service Technology and Chung Fu Tex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chung Fu Tex and Integrated Service 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 Integrated Service Technology are associated (or correlated) with Chung Fu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chung Fu Tex has no effect on the direction of Integrated Service i.e., Integrated Service and Chung Fu go up and down completely randomly.
Pair Corralation between Integrated Service and Chung Fu
Assuming the 90 days trading horizon Integrated Service Technology is expected to under-perform the Chung Fu. In addition to that, Integrated Service is 1.3 times more volatile than Chung Fu Tex International. It trades about -0.31 of its total potential returns per unit of risk. Chung Fu Tex International is currently generating about -0.19 per unit of volatility. If you would invest 4,745 in Chung Fu Tex International on August 28, 2024 and sell it today you would lose (455.00) from holding Chung Fu Tex International or give up 9.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Service Technology vs. Chung Fu Tex International
Performance |
| Timeline |
| Integrated Service |
| Chung Fu Tex |
Integrated Service and Chung Fu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Service and Chung Fu
The main advantage of trading using opposite Integrated Service and Chung Fu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Service position performs unexpectedly, Chung Fu 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 Fu will offset losses from the drop in Chung Fu's long position.| Integrated Service vs. Global Unichip Corp | Integrated Service vs. Asmedia Technology | Integrated Service vs. Unimicron Technology Corp | Integrated Service vs. Novatek Microelectronics Corp |
| Chung Fu vs. Chainqui Construction Development | Chung Fu vs. Zinwell | Chung Fu vs. Symtek Automation Asia | Chung Fu vs. CTCI Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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