Correlation Between Continental Holdings and Chun Yu
Can any of the company-specific risk be diversified away by investing in both Continental Holdings and Chun Yu 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 Continental Holdings and Chun Yu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental Holdings Corp and Chun Yu Works, you can compare the effects of market volatilities on Continental Holdings and Chun Yu 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 Continental Holdings with a short position of Chun Yu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Holdings and Chun Yu.
Diversification Opportunities for Continental Holdings and Chun Yu
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Continental and Chun is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Continental Holdings Corp and Chun Yu Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chun Yu Works and Continental Holdings 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 Continental Holdings Corp are associated (or correlated) with Chun Yu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chun Yu Works has no effect on the direction of Continental Holdings i.e., Continental Holdings and Chun Yu go up and down completely randomly.
Pair Corralation between Continental Holdings and Chun Yu
Assuming the 90 days trading horizon Continental Holdings is expected to generate 1.27 times less return on investment than Chun Yu. In addition to that, Continental Holdings is 1.26 times more volatile than Chun Yu Works. It trades about 0.02 of its total potential returns per unit of risk. Chun Yu Works is currently generating about 0.03 per unit of volatility. If you would invest 2,320 in Chun Yu Works on September 3, 2024 and sell it today you would earn a total of 325.00 from holding Chun Yu Works or generate 14.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Continental Holdings Corp vs. Chun Yu Works
Performance |
| Timeline |
| Continental Holdings Corp |
| Chun Yu Works |
Continental Holdings and Chun Yu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Holdings and Chun Yu
The main advantage of trading using opposite Continental Holdings and Chun Yu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Holdings position performs unexpectedly, Chun Yu 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 Chun Yu will offset losses from the drop in Chun Yu's long position.| Continental Holdings vs. BES Engineering Co | Continental Holdings vs. Chien Kuo Construction | Continental Holdings vs. Hung Sheng Construction | Continental Holdings vs. YungShin Global Holding |
| Chun Yu vs. Chun Yuan Steel | Chun Yu vs. China Steel Structure | Chun Yu vs. Chung Hung Steel | Chun Yu vs. Quintain Steel 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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