Correlation Between Hsinli Chemical and CoAsia Microelectronics
Can any of the company-specific risk be diversified away by investing in both Hsinli Chemical and CoAsia Microelectronics 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 Hsinli Chemical and CoAsia Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hsinli Chemical Industrial and CoAsia Microelectronics, you can compare the effects of market volatilities on Hsinli Chemical and CoAsia Microelectronics 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 Hsinli Chemical with a short position of CoAsia Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsinli Chemical and CoAsia Microelectronics.
Diversification Opportunities for Hsinli Chemical and CoAsia Microelectronics
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hsinli and CoAsia is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hsinli Chemical Industrial and CoAsia Microelectronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoAsia Microelectronics and Hsinli Chemical 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 Hsinli Chemical Industrial are associated (or correlated) with CoAsia Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoAsia Microelectronics has no effect on the direction of Hsinli Chemical i.e., Hsinli Chemical and CoAsia Microelectronics go up and down completely randomly.
Pair Corralation between Hsinli Chemical and CoAsia Microelectronics
Assuming the 90 days trading horizon Hsinli Chemical Industrial is expected to under-perform the CoAsia Microelectronics. But the stock apears to be less risky and, when comparing its historical volatility, Hsinli Chemical Industrial is 1.74 times less risky than CoAsia Microelectronics. The stock trades about -0.03 of its potential returns per unit of risk. The CoAsia Microelectronics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,845 in CoAsia Microelectronics on October 24, 2024 and sell it today you would earn a total of 75.00 from holding CoAsia Microelectronics or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hsinli Chemical Industrial vs. CoAsia Microelectronics
Performance |
| Timeline |
| Hsinli Chemical Indu |
| CoAsia Microelectronics |
Hsinli Chemical and CoAsia Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hsinli Chemical and CoAsia Microelectronics
The main advantage of trading using opposite Hsinli Chemical and CoAsia Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsinli Chemical position performs unexpectedly, CoAsia Microelectronics 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 CoAsia Microelectronics will offset losses from the drop in CoAsia Microelectronics' long position.| Hsinli Chemical vs. Yung Zip Chemical | Hsinli Chemical vs. Mechema Chemicals Int | Hsinli Chemical vs. Tong Hwa Synthetic Fiber | Hsinli Chemical vs. Cathay Chemical Works |
| CoAsia Microelectronics vs. Energenesis Biomedical Co | CoAsia Microelectronics vs. Prime Oil Chemical | CoAsia Microelectronics vs. Jia Jie Biomedical | CoAsia Microelectronics vs. Hsinli Chemical Industrial |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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