Correlation Between Chi Sheng and Gamania Digital
Can any of the company-specific risk be diversified away by investing in both Chi Sheng and Gamania Digital 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 Gamania Digital 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 Gamania Digital Entertainment, you can compare the effects of market volatilities on Chi Sheng and Gamania Digital 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 Gamania Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Sheng and Gamania Digital.
Diversification Opportunities for Chi Sheng and Gamania Digital
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chi and Gamania is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Chi Sheng Chemical and Gamania Digital Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamania Digital Ente 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 Gamania Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamania Digital Ente has no effect on the direction of Chi Sheng i.e., Chi Sheng and Gamania Digital go up and down completely randomly.
Pair Corralation between Chi Sheng and Gamania Digital
Assuming the 90 days trading horizon Chi Sheng is expected to generate 1.71 times less return on investment than Gamania Digital. But when comparing it to its historical volatility, Chi Sheng Chemical is 2.21 times less risky than Gamania Digital. It trades about 0.31 of its potential returns per unit of risk. Gamania Digital Entertainment is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 7,890 in Gamania Digital Entertainment on August 31, 2024 and sell it today you would earn a total of 750.00 from holding Gamania Digital Entertainment or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chi Sheng Chemical vs. Gamania Digital Entertainment
Performance |
| Timeline |
| Chi Sheng Chemical |
| Gamania Digital Ente |
Chi Sheng and Gamania Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chi Sheng and Gamania Digital
The main advantage of trading using opposite Chi Sheng and Gamania Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Sheng position performs unexpectedly, Gamania Digital 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 Gamania Digital will offset losses from the drop in Gamania Digital's long position.| Chi Sheng vs. Wei Chuan Foods | Chi Sheng vs. Standard Foods Corp | Chi Sheng vs. Sinopac Financial Holdings | Chi Sheng vs. Cathay Financial Holding |
| Gamania Digital vs. Soft World International | Gamania Digital vs. International Games System | Gamania Digital vs. Softstar Entertainment | Gamania Digital vs. Chinese Gamer International |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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