Correlation Between Chia Chang and Global Lighting
Can any of the company-specific risk be diversified away by investing in both Chia Chang and Global Lighting 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 Global Lighting 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 Global Lighting Technologies, you can compare the effects of market volatilities on Chia Chang and Global Lighting 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 Global Lighting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Chang and Global Lighting.
Diversification Opportunities for Chia Chang and Global Lighting
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chia and Global is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Chia Chang Co and Global Lighting Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Lighting Tech 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 Global Lighting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Lighting Tech has no effect on the direction of Chia Chang i.e., Chia Chang and Global Lighting go up and down completely randomly.
Pair Corralation between Chia Chang and Global Lighting
Assuming the 90 days trading horizon Chia Chang Co is expected to generate 0.58 times more return on investment than Global Lighting. However, Chia Chang Co is 1.74 times less risky than Global Lighting. It trades about 0.05 of its potential returns per unit of risk. Global Lighting Technologies is currently generating about 0.02 per unit of risk. If you would invest 3,352 in Chia Chang Co on September 12, 2024 and sell it today you would earn a total of 738.00 from holding Chia Chang Co or generate 22.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Chia Chang Co vs. Global Lighting Technologies
Performance |
| Timeline |
| Chia Chang |
| Global Lighting Tech |
Chia Chang and Global Lighting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Chang and Global Lighting
The main advantage of trading using opposite Chia Chang and Global Lighting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Chang position performs unexpectedly, Global Lighting 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 Global Lighting will offset losses from the drop in Global Lighting's long position.| Chia Chang vs. Yang Ming Marine | Chia Chang vs. Wan Hai Lines | Chia Chang vs. U Ming Marine Transport | Chia Chang vs. Taiwan Navigation Co |
| Global Lighting vs. Arcadyan Technology Corp | Global Lighting vs. Zhen Ding Technology | Global Lighting vs. Taiwan Surface Mounting | Global Lighting vs. Flexium Interconnect |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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