Correlation Between Jia Jie and Chaheng Precision
Can any of the company-specific risk be diversified away by investing in both Jia Jie and Chaheng Precision 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 Jia Jie and Chaheng Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jia Jie Biomedical and Chaheng Precision Co, you can compare the effects of market volatilities on Jia Jie and Chaheng Precision 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 Jia Jie with a short position of Chaheng Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jia Jie and Chaheng Precision.
Diversification Opportunities for Jia Jie and Chaheng Precision
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jia and Chaheng is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Jia Jie Biomedical and Chaheng Precision Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chaheng Precision and Jia Jie 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 Jia Jie Biomedical are associated (or correlated) with Chaheng Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chaheng Precision has no effect on the direction of Jia Jie i.e., Jia Jie and Chaheng Precision go up and down completely randomly.
Pair Corralation between Jia Jie and Chaheng Precision
Assuming the 90 days trading horizon Jia Jie Biomedical is expected to under-perform the Chaheng Precision. In addition to that, Jia Jie is 1.34 times more volatile than Chaheng Precision Co. It trades about -0.21 of its total potential returns per unit of risk. Chaheng Precision Co is currently generating about -0.08 per unit of volatility. If you would invest 9,450 in Chaheng Precision Co on September 12, 2024 and sell it today you would lose (230.00) from holding Chaheng Precision Co or give up 2.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jia Jie Biomedical vs. Chaheng Precision Co
Performance |
| Timeline |
| Jia Jie Biomedical |
| Chaheng Precision |
Jia Jie and Chaheng Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jia Jie and Chaheng Precision
The main advantage of trading using opposite Jia Jie and Chaheng Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jia Jie position performs unexpectedly, Chaheng Precision 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 Chaheng Precision will offset losses from the drop in Chaheng Precision's long position.| Jia Jie vs. Uni President Enterprises Corp | Jia Jie vs. Tingyi Holding Corp | Jia Jie vs. Lien Hwa Industrial | Jia Jie vs. Great Wall Enterprise |
| Chaheng Precision vs. Aerospace Industrial Development | Chaheng Precision vs. Air Asia Co | Chaheng Precision vs. Ruentex Development Co | Chaheng Precision vs. Symtek Automation Asia |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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