Correlation Between Chialin Precision and CKM Building
Can any of the company-specific risk be diversified away by investing in both Chialin Precision and CKM 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 CKM 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 CKM Building Material, you can compare the effects of market volatilities on Chialin Precision and CKM 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 CKM Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chialin Precision and CKM Building.
Diversification Opportunities for Chialin Precision and CKM Building
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chialin and CKM is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Chialin Precision Industrial and CKM Building Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKM Building Material 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 CKM Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKM Building Material has no effect on the direction of Chialin Precision i.e., Chialin Precision and CKM Building go up and down completely randomly.
Pair Corralation between Chialin Precision and CKM Building
Assuming the 90 days trading horizon Chialin Precision Industrial is expected to generate 0.87 times more return on investment than CKM Building. However, Chialin Precision Industrial is 1.15 times less risky than CKM Building. It trades about 0.14 of its potential returns per unit of risk. CKM Building Material is currently generating about -0.12 per unit of risk. If you would invest 8,400 in Chialin Precision Industrial on August 30, 2024 and sell it today you would earn a total of 290.00 from holding Chialin Precision Industrial or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chialin Precision Industrial vs. CKM Building Material
Performance |
| Timeline |
| Chialin Precision |
| CKM Building Material |
Chialin Precision and CKM Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chialin Precision and CKM Building
The main advantage of trading using opposite Chialin Precision and CKM Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chialin Precision position performs unexpectedly, CKM 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 CKM Building will offset losses from the drop in CKM Building's long position.| Chialin Precision vs. Hon Hai Precision | Chialin Precision vs. Delta Electronics | Chialin Precision vs. LARGAN Precision Co | Chialin Precision vs. E Ink Holdings |
| CKM Building vs. Genovate Biotechnology Co | CKM Building vs. Medigen Biotechnology | CKM Building vs. Posiflex Technology | CKM Building vs. GeneFerm Biotechnology 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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