Correlation Between Chialin Precision and Tainet Communication
Can any of the company-specific risk be diversified away by investing in both Chialin Precision and Tainet Communication 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 Tainet Communication 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 Tainet Communication System, you can compare the effects of market volatilities on Chialin Precision and Tainet Communication 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 Tainet Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chialin Precision and Tainet Communication.
Diversification Opportunities for Chialin Precision and Tainet Communication
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chialin and Tainet is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Chialin Precision Industrial and Tainet Communication System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainet Communication 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 Tainet Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainet Communication has no effect on the direction of Chialin Precision i.e., Chialin Precision and Tainet Communication go up and down completely randomly.
Pair Corralation between Chialin Precision and Tainet Communication
Assuming the 90 days trading horizon Chialin Precision Industrial is expected to under-perform the Tainet Communication. But the stock apears to be less risky and, when comparing its historical volatility, Chialin Precision Industrial is 1.26 times less risky than Tainet Communication. The stock trades about -0.03 of its potential returns per unit of risk. The Tainet Communication System is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 7,660 in Tainet Communication System on October 23, 2024 and sell it today you would earn a total of 40.00 from holding Tainet Communication System or generate 0.52% 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. Tainet Communication System
Performance |
| Timeline |
| Chialin Precision |
| Tainet Communication |
Chialin Precision and Tainet Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chialin Precision and Tainet Communication
The main advantage of trading using opposite Chialin Precision and Tainet Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chialin Precision position performs unexpectedly, Tainet Communication 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 Tainet Communication will offset losses from the drop in Tainet Communication's long position.| Chialin Precision vs. Tai Tung Communication | Chialin Precision vs. Galaxy Software Services | Chialin Precision vs. Far EasTone Telecommunications | Chialin Precision vs. Insyde Software |
| Tainet Communication vs. Chinese Maritime Transport | Tainet Communication vs. WinMate Communication INC | Tainet Communication vs. Excelsior Medical Co | Tainet Communication vs. Taiwan Mobile Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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