Correlation Between Chi Sheng and Ever Clear
Can any of the company-specific risk be diversified away by investing in both Chi Sheng and Ever Clear 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 Ever Clear 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 Ever Clear Environmental Eng, you can compare the effects of market volatilities on Chi Sheng and Ever Clear 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 Ever Clear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Sheng and Ever Clear.
Diversification Opportunities for Chi Sheng and Ever Clear
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chi and Ever is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Chi Sheng Chemical and Ever Clear Environmental Eng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ever Clear Environme 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 Ever Clear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ever Clear Environme has no effect on the direction of Chi Sheng i.e., Chi Sheng and Ever Clear go up and down completely randomly.
Pair Corralation between Chi Sheng and Ever Clear
Assuming the 90 days trading horizon Chi Sheng Chemical is expected to generate 1.35 times more return on investment than Ever Clear. However, Chi Sheng is 1.35 times more volatile than Ever Clear Environmental Eng. It trades about 0.15 of its potential returns per unit of risk. Ever Clear Environmental Eng is currently generating about -0.12 per unit of risk. If you would invest 2,645 in Chi Sheng Chemical on August 30, 2024 and sell it today you would earn a total of 105.00 from holding Chi Sheng Chemical or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Chi Sheng Chemical vs. Ever Clear Environmental Eng
Performance |
| Timeline |
| Chi Sheng Chemical |
| Ever Clear Environme |
Chi Sheng and Ever Clear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chi Sheng and Ever Clear
The main advantage of trading using opposite Chi Sheng and Ever Clear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Sheng position performs unexpectedly, Ever Clear 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 Ever Clear will offset losses from the drop in Ever Clear's long position.| Chi Sheng vs. Maxigen Biotech | Chi Sheng vs. Chunghwa Chemical Synthesis | Chi Sheng vs. Sinphar Pharmaceutical Co | Chi Sheng vs. ScinoPharm Taiwan |
| Ever Clear vs. Dimerco Data System | Ever Clear vs. WiseChip Semiconductor | Ever Clear vs. Davicom Semiconductor | Ever Clear vs. Powerchip Semiconductor Manufacturing |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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