Correlation Between Coxon Precise and Chain Chon
Can any of the company-specific risk be diversified away by investing in both Coxon Precise and Chain Chon 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 Coxon Precise and Chain Chon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coxon Precise Industrial and Chain Chon Industrial, you can compare the effects of market volatilities on Coxon Precise and Chain Chon 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 Coxon Precise with a short position of Chain Chon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coxon Precise and Chain Chon.
Diversification Opportunities for Coxon Precise and Chain Chon
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Coxon and Chain is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Coxon Precise Industrial and Chain Chon Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chain Chon Industrial and Coxon Precise 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 Coxon Precise Industrial are associated (or correlated) with Chain Chon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chain Chon Industrial has no effect on the direction of Coxon Precise i.e., Coxon Precise and Chain Chon go up and down completely randomly.
Pair Corralation between Coxon Precise and Chain Chon
Assuming the 90 days trading horizon Coxon Precise Industrial is expected to generate 1.45 times more return on investment than Chain Chon. However, Coxon Precise is 1.45 times more volatile than Chain Chon Industrial. It trades about 0.03 of its potential returns per unit of risk. Chain Chon Industrial is currently generating about 0.01 per unit of risk. If you would invest 1,560 in Coxon Precise Industrial on September 2, 2024 and sell it today you would earn a total of 285.00 from holding Coxon Precise Industrial or generate 18.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coxon Precise Industrial vs. Chain Chon Industrial
Performance |
| Timeline |
| Coxon Precise Industrial |
| Chain Chon Industrial |
Coxon Precise and Chain Chon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coxon Precise and Chain Chon
The main advantage of trading using opposite Coxon Precise and Chain Chon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coxon Precise position performs unexpectedly, Chain Chon 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 Chain Chon will offset losses from the drop in Chain Chon's long position.The idea behind Coxon Precise Industrial and Chain Chon Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Chain Chon vs. Trade Van Information Services | Chain Chon vs. C Media Electronics | Chain Chon vs. Mitake Information | Chain Chon vs. Pili International Multimedia |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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