Correlation Between Chung Hwa and SynCore Biotechnology
Can any of the company-specific risk be diversified away by investing in both Chung Hwa and SynCore Biotechnology 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 Chung Hwa and SynCore Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chung Hwa Food and SynCore Biotechnology Co, you can compare the effects of market volatilities on Chung Hwa and SynCore Biotechnology 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 Chung Hwa with a short position of SynCore Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Hwa and SynCore Biotechnology.
Diversification Opportunities for Chung Hwa and SynCore Biotechnology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chung and SynCore is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Chung Hwa Food and SynCore Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SynCore Biotechnology and Chung Hwa 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 Chung Hwa Food are associated (or correlated) with SynCore Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SynCore Biotechnology has no effect on the direction of Chung Hwa i.e., Chung Hwa and SynCore Biotechnology go up and down completely randomly.
Pair Corralation between Chung Hwa and SynCore Biotechnology
Assuming the 90 days trading horizon Chung Hwa Food is expected to generate 0.44 times more return on investment than SynCore Biotechnology. However, Chung Hwa Food is 2.29 times less risky than SynCore Biotechnology. It trades about 0.43 of its potential returns per unit of risk. SynCore Biotechnology Co is currently generating about 0.08 per unit of risk. If you would invest 8,570 in Chung Hwa Food on November 27, 2024 and sell it today you would earn a total of 420.00 from holding Chung Hwa Food or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Hwa Food vs. SynCore Biotechnology Co
Performance |
| Timeline |
| Chung Hwa Food |
| SynCore Biotechnology |
Chung Hwa and SynCore Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Hwa and SynCore Biotechnology
The main advantage of trading using opposite Chung Hwa and SynCore Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Hwa position performs unexpectedly, SynCore Biotechnology 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 SynCore Biotechnology will offset losses from the drop in SynCore Biotechnology's long position.| Chung Hwa vs. Mosa Industrial Corp | Chung Hwa vs. Jentech Precision Industrial | Chung Hwa vs. Sun Max Tech | Chung Hwa vs. Sunspring Metal Corp |
| SynCore Biotechnology vs. International CSRC Investment | SynCore Biotechnology vs. Pacific Hospital Supply | SynCore Biotechnology vs. Zhen Ding Technology | SynCore Biotechnology vs. Landis Taipei Hotel |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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