Correlation Between Chi Sheng and Icares Medicus
Can any of the company-specific risk be diversified away by investing in both Chi Sheng and Icares Medicus 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 Icares Medicus 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 Icares Medicus, you can compare the effects of market volatilities on Chi Sheng and Icares Medicus 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 Icares Medicus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Sheng and Icares Medicus.
Diversification Opportunities for Chi Sheng and Icares Medicus
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chi and Icares is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Chi Sheng Chemical and Icares Medicus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icares Medicus 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 Icares Medicus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icares Medicus has no effect on the direction of Chi Sheng i.e., Chi Sheng and Icares Medicus go up and down completely randomly.
Pair Corralation between Chi Sheng and Icares Medicus
Assuming the 90 days trading horizon Chi Sheng Chemical is expected to generate 0.32 times more return on investment than Icares Medicus. However, Chi Sheng Chemical is 3.16 times less risky than Icares Medicus. It trades about 0.21 of its potential returns per unit of risk. Icares Medicus is currently generating about -0.24 per unit of risk. If you would invest 2,605 in Chi Sheng Chemical on August 26, 2024 and sell it today you would earn a total of 75.00 from holding Chi Sheng Chemical or generate 2.88% 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. Icares Medicus
Performance |
| Timeline |
| Chi Sheng Chemical |
| Icares Medicus |
Chi Sheng and Icares Medicus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chi Sheng and Icares Medicus
The main advantage of trading using opposite Chi Sheng and Icares Medicus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Sheng position performs unexpectedly, Icares Medicus 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 Icares Medicus will offset losses from the drop in Icares Medicus' long position.| Chi Sheng vs. StShine Optical Co | Chi Sheng vs. Bioteque | Chi Sheng vs. Medeon Biodesign | Chi Sheng vs. SciVision Biotech |
| Icares Medicus vs. StShine Optical Co | Icares Medicus vs. Bioteque | Icares Medicus vs. Medeon Biodesign | Icares Medicus vs. SciVision Biotech |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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