Correlation Between Chaheng Precision and Lien Chang
Can any of the company-specific risk be diversified away by investing in both Chaheng Precision and Lien Chang 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 Chaheng Precision and Lien Chang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chaheng Precision Co and Lien Chang Electronic, you can compare the effects of market volatilities on Chaheng Precision and Lien Chang 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 Chaheng Precision with a short position of Lien Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chaheng Precision and Lien Chang.
Diversification Opportunities for Chaheng Precision and Lien Chang
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chaheng and Lien is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Chaheng Precision Co and Lien Chang Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lien Chang Electronic and Chaheng Precision 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 Chaheng Precision Co are associated (or correlated) with Lien Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lien Chang Electronic has no effect on the direction of Chaheng Precision i.e., Chaheng Precision and Lien Chang go up and down completely randomly.
Pair Corralation between Chaheng Precision and Lien Chang
Assuming the 90 days trading horizon Chaheng Precision Co is expected to generate 0.49 times more return on investment than Lien Chang. However, Chaheng Precision Co is 2.02 times less risky than Lien Chang. It trades about -0.08 of its potential returns per unit of risk. Lien Chang Electronic is currently generating about -0.4 per unit of risk. If you would invest 9,220 in Chaheng Precision Co on September 22, 2024 and sell it today you would lose (230.00) from holding Chaheng Precision Co or give up 2.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chaheng Precision Co vs. Lien Chang Electronic
Performance |
| Timeline |
| Chaheng Precision |
| Lien Chang Electronic |
Chaheng Precision and Lien Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chaheng Precision and Lien Chang
The main advantage of trading using opposite Chaheng Precision and Lien Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chaheng Precision position performs unexpectedly, Lien Chang 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 Lien Chang will offset losses from the drop in Lien Chang's long position.| Chaheng Precision vs. CSBC Corp Taiwan | Chaheng Precision vs. Eva Airways Corp | Chaheng Precision vs. Taiwan High Speed | Chaheng Precision vs. China Airlines |
| Lien Chang vs. Century Wind Power | Lien Chang vs. Green World Fintech | Lien Chang vs. Ingentec | Lien Chang vs. Chaheng Precision 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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