Correlation Between Continental Holdings and Chien Kuo
Can any of the company-specific risk be diversified away by investing in both Continental Holdings and Chien Kuo 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 Chien Kuo 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 Chien Kuo Construction, you can compare the effects of market volatilities on Continental Holdings and Chien Kuo 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 Chien Kuo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Holdings and Chien Kuo.
Diversification Opportunities for Continental Holdings and Chien Kuo
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Continental and Chien is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Continental Holdings Corp and Chien Kuo Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chien Kuo Construction 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 Chien Kuo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chien Kuo Construction has no effect on the direction of Continental Holdings i.e., Continental Holdings and Chien Kuo go up and down completely randomly.
Pair Corralation between Continental Holdings and Chien Kuo
Assuming the 90 days trading horizon Continental Holdings Corp is expected to generate 0.97 times more return on investment than Chien Kuo. However, Continental Holdings Corp is 1.03 times less risky than Chien Kuo. It trades about 0.09 of its potential returns per unit of risk. Chien Kuo Construction is currently generating about 0.0 per unit of risk. If you would invest 2,920 in Continental Holdings Corp on September 2, 2024 and sell it today you would earn a total of 120.00 from holding Continental Holdings Corp or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Continental Holdings Corp vs. Chien Kuo Construction
Performance |
| Timeline |
| Continental Holdings Corp |
| Chien Kuo Construction |
Continental Holdings and Chien Kuo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Holdings and Chien Kuo
The main advantage of trading using opposite Continental Holdings and Chien Kuo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Holdings position performs unexpectedly, Chien Kuo 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 Chien Kuo will offset losses from the drop in Chien Kuo'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 |
| Chien Kuo vs. BES Engineering Co | Chien Kuo vs. Continental Holdings Corp | Chien Kuo vs. Kee Tai Properties | Chien Kuo vs. Hung Sheng Construction |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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