Correlation Between Chi Sheng and Double Bond
Can any of the company-specific risk be diversified away by investing in both Chi Sheng and Double Bond 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 Double Bond 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 Double Bond Chemical, you can compare the effects of market volatilities on Chi Sheng and Double Bond 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 Double Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Sheng and Double Bond.
Diversification Opportunities for Chi Sheng and Double Bond
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chi and Double is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Chi Sheng Chemical and Double Bond Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Double Bond 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 Double Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Double Bond Chemical has no effect on the direction of Chi Sheng i.e., Chi Sheng and Double Bond go up and down completely randomly.
Pair Corralation between Chi Sheng and Double Bond
Assuming the 90 days trading horizon Chi Sheng is expected to generate 2.12 times less return on investment than Double Bond. In addition to that, Chi Sheng is 1.75 times more volatile than Double Bond Chemical. It trades about 0.01 of its total potential returns per unit of risk. Double Bond Chemical is currently generating about 0.05 per unit of volatility. If you would invest 4,485 in Double Bond Chemical on October 12, 2024 and sell it today you would earn a total of 30.00 from holding Double Bond Chemical or generate 0.67% 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. Double Bond Chemical
Performance |
| Timeline |
| Chi Sheng Chemical |
| Double Bond Chemical |
Chi Sheng and Double Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chi Sheng and Double Bond
The main advantage of trading using opposite Chi Sheng and Double Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Sheng position performs unexpectedly, Double Bond 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 Double Bond will offset losses from the drop in Double Bond's long position.| Chi Sheng vs. PChome Online | Chi Sheng vs. Lien Chang Electronic | Chi Sheng vs. Bright Led Electronics | Chi Sheng vs. Everlight Electronics Co |
| Double Bond vs. Coremax Corp | Double Bond vs. Taiwan Hopax Chemsistry | Double Bond vs. Delta Electronics | Double Bond vs. China Steel 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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