Correlation Between Chia Chang and FSP Technology
Can any of the company-specific risk be diversified away by investing in both Chia Chang and FSP Technology 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 Chia Chang and FSP Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia Chang Co and FSP Technology, you can compare the effects of market volatilities on Chia Chang and FSP Technology 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 Chia Chang with a short position of FSP Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Chang and FSP Technology.
Diversification Opportunities for Chia Chang and FSP Technology
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chia and FSP is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Chia Chang Co and FSP Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSP Technology and Chia Chang 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 Chia Chang Co are associated (or correlated) with FSP Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSP Technology has no effect on the direction of Chia Chang i.e., Chia Chang and FSP Technology go up and down completely randomly.
Pair Corralation between Chia Chang and FSP Technology
Assuming the 90 days trading horizon Chia Chang Co is expected to under-perform the FSP Technology. But the stock apears to be less risky and, when comparing its historical volatility, Chia Chang Co is 2.16 times less risky than FSP Technology. The stock trades about -0.08 of its potential returns per unit of risk. The FSP Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,160 in FSP Technology on September 3, 2024 and sell it today you would earn a total of 370.00 from holding FSP Technology or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chia Chang Co vs. FSP Technology
Performance |
| Timeline |
| Chia Chang |
| FSP Technology |
Chia Chang and FSP Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Chang and FSP Technology
The main advantage of trading using opposite Chia Chang and FSP Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Chang position performs unexpectedly, FSP Technology 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 FSP Technology will offset losses from the drop in FSP Technology's long position.| Chia Chang vs. FSP Technology | Chia Chang vs. HannStar Board Corp | Chia Chang vs. Taiwan Surface Mounting | Chia Chang vs. Emerging Display Technologies |
| FSP Technology vs. Universal Microelectronics Co | FSP Technology vs. AVerMedia Technologies | FSP Technology vs. Symtek Automation Asia | FSP Technology vs. WiseChip Semiconductor |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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