Correlation Between Chaheng Precision and Tatung System
Can any of the company-specific risk be diversified away by investing in both Chaheng Precision and Tatung System 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 Tatung System 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 Tatung System Technologies, you can compare the effects of market volatilities on Chaheng Precision and Tatung System 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 Tatung System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chaheng Precision and Tatung System.
Diversification Opportunities for Chaheng Precision and Tatung System
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chaheng and Tatung is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chaheng Precision Co and Tatung System Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tatung System Techno 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 Tatung System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tatung System Techno has no effect on the direction of Chaheng Precision i.e., Chaheng Precision and Tatung System go up and down completely randomly.
Pair Corralation between Chaheng Precision and Tatung System
Assuming the 90 days trading horizon Chaheng Precision is expected to generate 2.42 times less return on investment than Tatung System. But when comparing it to its historical volatility, Chaheng Precision Co is 1.57 times less risky than Tatung System. It trades about 0.03 of its potential returns per unit of risk. Tatung System Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,918 in Tatung System Technologies on August 27, 2024 and sell it today you would earn a total of 2,782 from holding Tatung System Technologies or generate 47.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chaheng Precision Co vs. Tatung System Technologies
Performance |
| Timeline |
| Chaheng Precision |
| Tatung System Techno |
Chaheng Precision and Tatung System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chaheng Precision and Tatung System
The main advantage of trading using opposite Chaheng Precision and Tatung System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chaheng Precision position performs unexpectedly, Tatung System 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 Tatung System will offset losses from the drop in Tatung System's long position.| Chaheng Precision vs. China Airlines | Chaheng Precision vs. Formosa Plastics Corp | Chaheng Precision vs. Ruentex Development Co | Chaheng Precision vs. Symtek Automation Asia |
| Tatung System vs. Alcor Micro | Tatung System vs. Singatron Enterprise Co | Tatung System vs. Wah Hong Industrial | Tatung System vs. CoAsia Microelectronics |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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