Correlation Between Chi Sheng and Connection Technology
Can any of the company-specific risk be diversified away by investing in both Chi Sheng and Connection Technology 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 Connection Technology 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 Connection Technology Systems, you can compare the effects of market volatilities on Chi Sheng and Connection Technology 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 Connection Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Sheng and Connection Technology.
Diversification Opportunities for Chi Sheng and Connection Technology
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chi and Connection is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Chi Sheng Chemical and Connection Technology Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connection Technology 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 Connection Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connection Technology has no effect on the direction of Chi Sheng i.e., Chi Sheng and Connection Technology go up and down completely randomly.
Pair Corralation between Chi Sheng and Connection Technology
Assuming the 90 days trading horizon Chi Sheng Chemical is expected to generate 0.28 times more return on investment than Connection Technology. However, Chi Sheng Chemical is 3.52 times less risky than Connection Technology. It trades about 0.31 of its potential returns per unit of risk. Connection Technology Systems is currently generating about -0.01 per unit of risk. If you would invest 2,635 in Chi Sheng Chemical on September 12, 2024 and sell it today you would earn a total of 165.00 from holding Chi Sheng Chemical or generate 6.26% 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. Connection Technology Systems
Performance |
| Timeline |
| Chi Sheng Chemical |
| Connection Technology |
Chi Sheng and Connection Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chi Sheng and Connection Technology
The main advantage of trading using opposite Chi Sheng and Connection Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Sheng position performs unexpectedly, Connection Technology 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 Connection Technology will offset losses from the drop in Connection Technology's long position.| Chi Sheng vs. SciVision Biotech | Chi Sheng vs. Ruentex Development Co | Chi Sheng vs. WiseChip Semiconductor | Chi Sheng vs. Novatek Microelectronics Corp |
| Connection Technology vs. Simple Mart Retail | Connection Technology vs. Chernan Metal Industrial | Connection Technology vs. Asia Metal Industries | Connection Technology vs. Chi Sheng Chemical |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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