Correlation Between Double Bond and Chi Sheng
Can any of the company-specific risk be diversified away by investing in both Double Bond and Chi Sheng 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 Double Bond and Chi Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Double Bond Chemical and Chi Sheng Chemical, you can compare the effects of market volatilities on Double Bond and Chi Sheng 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 Double Bond with a short position of Chi Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Double Bond and Chi Sheng.
Diversification Opportunities for Double Bond and Chi Sheng
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Double and Chi is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Double Bond Chemical and Chi Sheng Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chi Sheng Chemical and Double Bond 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 Double Bond Chemical are associated (or correlated) with Chi Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chi Sheng Chemical has no effect on the direction of Double Bond i.e., Double Bond and Chi Sheng go up and down completely randomly.
Pair Corralation between Double Bond and Chi Sheng
Assuming the 90 days trading horizon Double Bond Chemical is expected to generate 0.57 times more return on investment than Chi Sheng. However, Double Bond Chemical is 1.75 times less risky than Chi Sheng. It trades about 0.05 of its potential returns per unit of risk. Chi Sheng Chemical is currently generating about 0.01 per unit of risk. If you would invest 4,485 in Double Bond Chemical on October 12, 2024 and sell it today you would earn a total of 30.00 from holding Double Bond Chemical or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Double Bond Chemical vs. Chi Sheng Chemical
Performance |
| Timeline |
| Double Bond Chemical |
| Chi Sheng Chemical |
Double Bond and Chi Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Double Bond and Chi Sheng
The main advantage of trading using opposite Double Bond and Chi Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Double Bond position performs unexpectedly, Chi Sheng 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 Chi Sheng will offset losses from the drop in Chi Sheng's long position.| Double Bond vs. Coremax Corp | Double Bond vs. Taiwan Hopax Chemsistry | Double Bond vs. Delta Electronics | Double Bond vs. China Steel Chemical |
| Chi Sheng vs. PChome Online | Chi Sheng vs. Lien Chang Electronic | Chi Sheng vs. Bright Led Electronics | Chi Sheng vs. Everlight Electronics 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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