Correlation Between Chi Sheng and K Way
Can any of the company-specific risk be diversified away by investing in both Chi Sheng and K Way 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 K Way 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 K Way Information, you can compare the effects of market volatilities on Chi Sheng and K Way 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 K Way. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Sheng and K Way.
Diversification Opportunities for Chi Sheng and K Way
Poor diversification
The 3 months correlation between Chi and 5201 is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Chi Sheng Chemical and K Way Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Way Information 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 K Way. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Way Information has no effect on the direction of Chi Sheng i.e., Chi Sheng and K Way go up and down completely randomly.
Pair Corralation between Chi Sheng and K Way
Assuming the 90 days trading horizon Chi Sheng is expected to generate 1.96 times less return on investment than K Way. But when comparing it to its historical volatility, Chi Sheng Chemical is 1.37 times less risky than K Way. It trades about 0.01 of its potential returns per unit of risk. K Way Information is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,620 in K Way Information on October 21, 2024 and sell it today you would earn a total of 265.00 from holding K Way Information or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chi Sheng Chemical vs. K Way Information
Performance |
| Timeline |
| Chi Sheng Chemical |
| K Way Information |
Chi Sheng and K Way Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chi Sheng and K Way
The main advantage of trading using opposite Chi Sheng and K Way positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Sheng position performs unexpectedly, K Way 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 K Way will offset losses from the drop in K Way's long position.| Chi Sheng vs. K Way Information | Chi Sheng vs. WIN Semiconductors | Chi Sheng vs. Jetway Information Co | Chi Sheng vs. Syntek Semiconductor Co |
| K Way vs. Farglory FTZ Investment | K Way vs. RiTdisplay Corp | K Way vs. Insyde Software | K Way vs. Sesoda Corp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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