Correlation Between Chi Sheng and Gigastorage Corp
Can any of the company-specific risk be diversified away by investing in both Chi Sheng and Gigastorage Corp 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 Gigastorage Corp 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 Gigastorage Corp, you can compare the effects of market volatilities on Chi Sheng and Gigastorage Corp 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 Gigastorage Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Sheng and Gigastorage Corp.
Diversification Opportunities for Chi Sheng and Gigastorage Corp
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chi and Gigastorage is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Chi Sheng Chemical and Gigastorage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigastorage Corp 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 Gigastorage Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigastorage Corp has no effect on the direction of Chi Sheng i.e., Chi Sheng and Gigastorage Corp go up and down completely randomly.
Pair Corralation between Chi Sheng and Gigastorage Corp
Assuming the 90 days trading horizon Chi Sheng Chemical is expected to generate 0.37 times more return on investment than Gigastorage Corp. However, Chi Sheng Chemical is 2.69 times less risky than Gigastorage Corp. It trades about 0.34 of its potential returns per unit of risk. Gigastorage Corp is currently generating about -0.18 per unit of risk. If you would invest 2,620 in Chi Sheng Chemical on September 1, 2024 and sell it today you would earn a total of 155.00 from holding Chi Sheng Chemical or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chi Sheng Chemical vs. Gigastorage Corp
Performance |
| Timeline |
| Chi Sheng Chemical |
| Gigastorage Corp |
Chi Sheng and Gigastorage Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chi Sheng and Gigastorage Corp
The main advantage of trading using opposite Chi Sheng and Gigastorage Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Sheng position performs unexpectedly, Gigastorage Corp 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 Gigastorage Corp will offset losses from the drop in Gigastorage Corp's long position.| Chi Sheng vs. Mechema Chemicals Int | Chi Sheng vs. Pontex Polyblend CoLtd | Chi Sheng vs. Insyde Software | Chi Sheng vs. Arbor Technology |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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