Correlation Between Chi Sheng and Hi Lai
Can any of the company-specific risk be diversified away by investing in both Chi Sheng and Hi Lai 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 Chi Sheng and Hi Lai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chi Sheng Chemical and Hi Lai Foods Co, you can compare the effects of market volatilities on Chi Sheng and Hi Lai 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 Chi Sheng with a short position of Hi Lai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Sheng and Hi Lai.
Diversification Opportunities for Chi Sheng and Hi Lai
Pay attention - limited upside
The 3 months correlation between Chi and 1268 is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chi Sheng Chemical and Hi Lai Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Lai Foods and Chi Sheng 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 Chi Sheng Chemical are associated (or correlated) with Hi Lai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Lai Foods has no effect on the direction of Chi Sheng i.e., Chi Sheng and Hi Lai go up and down completely randomly.
Pair Corralation between Chi Sheng and Hi Lai
Assuming the 90 days trading horizon Chi Sheng is expected to generate 3.89 times less return on investment than Hi Lai. But when comparing it to its historical volatility, Chi Sheng Chemical is 1.05 times less risky than Hi Lai. It trades about 0.01 of its potential returns per unit of risk. Hi Lai Foods Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 12,503 in Hi Lai Foods Co on October 28, 2024 and sell it today you would earn a total of 2,747 from holding Hi Lai Foods Co or generate 21.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chi Sheng Chemical vs. Hi Lai Foods Co
Performance |
| Timeline |
| Chi Sheng Chemical |
| Hi Lai Foods |
Chi Sheng and Hi Lai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chi Sheng and Hi Lai
The main advantage of trading using opposite Chi Sheng and Hi Lai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Sheng position performs unexpectedly, Hi Lai 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 Hi Lai will offset losses from the drop in Hi Lai's long position.| Chi Sheng vs. Pegavision | Chi Sheng vs. StShine Optical Co | Chi Sheng vs. Bioteque | Chi Sheng vs. Medeon Biodesign |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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