Correlation Between CHC Healthcare and Grand Plastic
Can any of the company-specific risk be diversified away by investing in both CHC Healthcare and Grand Plastic 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 CHC Healthcare and Grand Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHC Healthcare Group and Grand Plastic Technology, you can compare the effects of market volatilities on CHC Healthcare and Grand Plastic 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 CHC Healthcare with a short position of Grand Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHC Healthcare and Grand Plastic.
Diversification Opportunities for CHC Healthcare and Grand Plastic
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CHC and Grand is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding CHC Healthcare Group and Grand Plastic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Plastic Technology and CHC Healthcare 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 CHC Healthcare Group are associated (or correlated) with Grand Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Plastic Technology has no effect on the direction of CHC Healthcare i.e., CHC Healthcare and Grand Plastic go up and down completely randomly.
Pair Corralation between CHC Healthcare and Grand Plastic
Assuming the 90 days trading horizon CHC Healthcare Group is expected to under-perform the Grand Plastic. But the stock apears to be less risky and, when comparing its historical volatility, CHC Healthcare Group is 1.5 times less risky than Grand Plastic. The stock trades about -0.03 of its potential returns per unit of risk. The Grand Plastic Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 169,500 in Grand Plastic Technology on September 5, 2024 and sell it today you would earn a total of 2,500 from holding Grand Plastic Technology or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHC Healthcare Group vs. Grand Plastic Technology
Performance |
| Timeline |
| CHC Healthcare Group |
| Grand Plastic Technology |
CHC Healthcare and Grand Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHC Healthcare and Grand Plastic
The main advantage of trading using opposite CHC Healthcare and Grand Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHC Healthcare position performs unexpectedly, Grand Plastic 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 Grand Plastic will offset losses from the drop in Grand Plastic's long position.| CHC Healthcare vs. Phytohealth Corp | CHC Healthcare vs. Hung Sheng Construction | CHC Healthcare vs. De Licacy Industrial | CHC Healthcare vs. YungShin Global Holding |
| Grand Plastic vs. Yuanta Financial Holdings | Grand Plastic vs. Fubon Financial Holding | Grand Plastic vs. Taishin Financial Holding | Grand Plastic vs. Union Insurance Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |