Correlation Between Materials Analysis and Chung Fu
Can any of the company-specific risk be diversified away by investing in both Materials Analysis 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 Materials Analysis and Chung Fu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materials Analysis Technology and Chung Fu Tex International, you can compare the effects of market volatilities on Materials Analysis 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 Materials Analysis with a short position of Chung Fu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materials Analysis and Chung Fu.
Diversification Opportunities for Materials Analysis and Chung Fu
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Materials and Chung is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Materials Analysis 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 Materials Analysis 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 Materials Analysis 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 Materials Analysis i.e., Materials Analysis and Chung Fu go up and down completely randomly.
Pair Corralation between Materials Analysis and Chung Fu
Assuming the 90 days trading horizon Materials Analysis Technology is expected to generate 0.9 times more return on investment than Chung Fu. However, Materials Analysis Technology is 1.11 times less risky than Chung Fu. It trades about -0.05 of its potential returns per unit of risk. Chung Fu Tex International is currently generating about -0.05 per unit of risk. If you would invest 25,800 in Materials Analysis Technology on September 14, 2024 and sell it today you would lose (450.00) from holding Materials Analysis Technology or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Materials Analysis Technology vs. Chung Fu Tex International
Performance |
| Timeline |
| Materials Analysis |
| Chung Fu Tex |
Materials Analysis and Chung Fu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materials Analysis and Chung Fu
The main advantage of trading using opposite Materials Analysis and Chung Fu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materials Analysis 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.| Materials Analysis vs. Integrated Service Technology | Materials Analysis vs. ASE Industrial Holding | Materials Analysis vs. eMemory Technology | Materials Analysis vs. Ruentex Development Co |
| Chung Fu vs. IBF Financial Holdings | Chung Fu vs. CKM Building Material | Chung Fu vs. General Plastic Industrial | Chung Fu vs. Materials Analysis Technology |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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