Correlation Between Chia Chang and X Legend
Can any of the company-specific risk be diversified away by investing in both Chia Chang and X Legend 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 X Legend 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 X Legend Entertainment Co, you can compare the effects of market volatilities on Chia Chang and X Legend 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 X Legend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Chang and X Legend.
Diversification Opportunities for Chia Chang and X Legend
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chia and 4994 is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Chia Chang Co and X Legend Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Legend Entertainment 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 X Legend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Legend Entertainment has no effect on the direction of Chia Chang i.e., Chia Chang and X Legend go up and down completely randomly.
Pair Corralation between Chia Chang and X Legend
Assuming the 90 days trading horizon Chia Chang Co is expected to under-perform the X Legend. But the stock apears to be less risky and, when comparing its historical volatility, Chia Chang Co is 1.02 times less risky than X Legend. The stock trades about -0.13 of its potential returns per unit of risk. The X Legend Entertainment Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 10,200 in X Legend Entertainment Co on September 12, 2024 and sell it today you would earn a total of 400.00 from holding X Legend Entertainment Co or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chia Chang Co vs. X Legend Entertainment Co
Performance |
| Timeline |
| Chia Chang |
| X Legend Entertainment |
Chia Chang and X Legend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Chang and X Legend
The main advantage of trading using opposite Chia Chang and X Legend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Chang position performs unexpectedly, X Legend 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 X Legend will offset losses from the drop in X Legend'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 |
| X Legend vs. Cheng Mei Materials | X Legend vs. Lemtech Holdings Co | X Legend vs. Chia Chang Co | X Legend vs. Ruentex Development 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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