Correlation Between Chi Sheng and PChome Online
Can any of the company-specific risk be diversified away by investing in both Chi Sheng and PChome Online 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 PChome Online 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 PChome Online, you can compare the effects of market volatilities on Chi Sheng and PChome Online 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 PChome Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Sheng and PChome Online.
Diversification Opportunities for Chi Sheng and PChome Online
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chi and PChome is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Chi Sheng Chemical and PChome Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PChome Online 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 PChome Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PChome Online has no effect on the direction of Chi Sheng i.e., Chi Sheng and PChome Online go up and down completely randomly.
Pair Corralation between Chi Sheng and PChome Online
Assuming the 90 days trading horizon Chi Sheng Chemical is expected to generate 0.46 times more return on investment than PChome Online. However, Chi Sheng Chemical is 2.18 times less risky than PChome Online. It trades about 0.2 of its potential returns per unit of risk. PChome Online is currently generating about -0.07 per unit of risk. If you would invest 2,810 in Chi Sheng Chemical on November 6, 2024 and sell it today you would earn a total of 90.00 from holding Chi Sheng Chemical or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chi Sheng Chemical vs. PChome Online
Performance |
| Timeline |
| Chi Sheng Chemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| PChome Online |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chi Sheng and PChome Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chi Sheng and PChome Online
The main advantage of trading using opposite Chi Sheng and PChome Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Sheng position performs unexpectedly, PChome Online 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 PChome Online will offset losses from the drop in PChome Online's long position.The idea behind Chi Sheng Chemical and PChome Online pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |