Correlation Between Chialin Precision and Goldsun Building
Can any of the company-specific risk be diversified away by investing in both Chialin Precision and Goldsun Building 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 Chialin Precision and Goldsun Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chialin Precision Industrial and Goldsun Building Materials, you can compare the effects of market volatilities on Chialin Precision and Goldsun Building 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 Chialin Precision with a short position of Goldsun Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chialin Precision and Goldsun Building.
Diversification Opportunities for Chialin Precision and Goldsun Building
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chialin and Goldsun is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Chialin Precision Industrial and Goldsun Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldsun Building Mat and Chialin Precision 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 Chialin Precision Industrial are associated (or correlated) with Goldsun Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldsun Building Mat has no effect on the direction of Chialin Precision i.e., Chialin Precision and Goldsun Building go up and down completely randomly.
Pair Corralation between Chialin Precision and Goldsun Building
Assuming the 90 days trading horizon Chialin Precision Industrial is expected to generate 0.95 times more return on investment than Goldsun Building. However, Chialin Precision Industrial is 1.06 times less risky than Goldsun Building. It trades about 0.06 of its potential returns per unit of risk. Goldsun Building Materials is currently generating about 0.06 per unit of risk. If you would invest 5,673 in Chialin Precision Industrial on November 19, 2024 and sell it today you would earn a total of 3,367 from holding Chialin Precision Industrial or generate 59.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chialin Precision Industrial vs. Goldsun Building Materials
Performance |
| Timeline |
| Chialin Precision |
| Goldsun Building Mat |
Chialin Precision and Goldsun Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chialin Precision and Goldsun Building
The main advantage of trading using opposite Chialin Precision and Goldsun Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chialin Precision position performs unexpectedly, Goldsun Building 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 Goldsun Building will offset losses from the drop in Goldsun Building's long position.| Chialin Precision vs. CHINA DEVELOPMENT FINANCIAL | Chialin Precision vs. CTBC Financial Holding | Chialin Precision vs. Feng Ching Metal | Chialin Precision vs. Chernan Metal Industrial |
| Goldsun Building vs. Basso Industry Corp | Goldsun Building vs. Chung Hsin Electric Machinery | Goldsun Building vs. TYC Brother Industrial | Goldsun Building vs. TECO Electric Machinery |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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