Correlation Between Chi Sheng and Standard Chemical
Can any of the company-specific risk be diversified away by investing in both Chi Sheng and Standard Chemical 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 Standard Chemical 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 Standard Chemical Pharmaceutical, you can compare the effects of market volatilities on Chi Sheng and Standard Chemical 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 Standard Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Sheng and Standard Chemical.
Diversification Opportunities for Chi Sheng and Standard Chemical
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chi and Standard is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Chi Sheng Chemical and Standard Chemical Pharmaceutic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Chemical 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 Standard Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Chemical has no effect on the direction of Chi Sheng i.e., Chi Sheng and Standard Chemical go up and down completely randomly.
Pair Corralation between Chi Sheng and Standard Chemical
Assuming the 90 days trading horizon Chi Sheng Chemical is expected to generate 0.92 times more return on investment than Standard Chemical. However, Chi Sheng Chemical is 1.08 times less risky than Standard Chemical. It trades about 0.33 of its potential returns per unit of risk. Standard Chemical Pharmaceutical is currently generating about 0.11 per unit of risk. If you would invest 2,625 in Chi Sheng Chemical on September 2, 2024 and sell it today you would earn a total of 150.00 from holding Chi Sheng Chemical or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chi Sheng Chemical vs. Standard Chemical Pharmaceutic
Performance |
| Timeline |
| Chi Sheng Chemical |
| Standard Chemical |
Chi Sheng and Standard Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chi Sheng and Standard Chemical
The main advantage of trading using opposite Chi Sheng and Standard Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Sheng position performs unexpectedly, Standard Chemical 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 Standard Chemical will offset losses from the drop in Standard Chemical's long position.| Chi Sheng vs. U Media Communications | Chi Sheng vs. Central Reinsurance Corp | Chi Sheng vs. U Tech Media Corp | Chi Sheng vs. Johnson Health Tech |
| Standard Chemical vs. Sinphar Pharmaceutical Co | Standard Chemical vs. Grape King Bio | Standard Chemical vs. Apex Biotechnology Corp | Standard Chemical vs. Maywufa 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 Stocks Directory module to find actively traded stocks across global markets.
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