Correlation Between Skardin Industrial and Chia Yi
Can any of the company-specific risk be diversified away by investing in both Skardin Industrial and Chia Yi 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 Skardin Industrial and Chia Yi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skardin Industrial and Chia Yi Steel, you can compare the effects of market volatilities on Skardin Industrial and Chia Yi 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 Skardin Industrial with a short position of Chia Yi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skardin Industrial and Chia Yi.
Diversification Opportunities for Skardin Industrial and Chia Yi
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Skardin and Chia is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Skardin Industrial and Chia Yi Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chia Yi Steel and Skardin Industrial 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 Skardin Industrial are associated (or correlated) with Chia Yi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chia Yi Steel has no effect on the direction of Skardin Industrial i.e., Skardin Industrial and Chia Yi go up and down completely randomly.
Pair Corralation between Skardin Industrial and Chia Yi
Assuming the 90 days trading horizon Skardin Industrial is expected to generate 2.99 times more return on investment than Chia Yi. However, Skardin Industrial is 2.99 times more volatile than Chia Yi Steel. It trades about 0.2 of its potential returns per unit of risk. Chia Yi Steel is currently generating about -0.66 per unit of risk. If you would invest 5,700 in Skardin Industrial on November 29, 2024 and sell it today you would earn a total of 620.00 from holding Skardin Industrial or generate 10.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skardin Industrial vs. Chia Yi Steel
Performance |
| Timeline |
| Skardin Industrial |
| Chia Yi Steel |
Skardin Industrial and Chia Yi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skardin Industrial and Chia Yi
The main advantage of trading using opposite Skardin Industrial and Chia Yi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skardin Industrial position performs unexpectedly, Chia Yi 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 Chia Yi will offset losses from the drop in Chia Yi's long position.| Skardin Industrial vs. Central Reinsurance Corp | Skardin Industrial vs. Simple Mart Retail | Skardin Industrial vs. China Development Financial | Skardin Industrial vs. U Media Communications |
| Chia Yi vs. Chailease Holding Co | Chia Yi vs. Cameo Communications | Chia Yi vs. Emerging Display Technologies | Chia Yi vs. Lian Hwa Foods |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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