Correlation Between Chia Chang and HannStar Board
Can any of the company-specific risk be diversified away by investing in both Chia Chang and HannStar Board 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 HannStar Board 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 HannStar Board Corp, you can compare the effects of market volatilities on Chia Chang and HannStar Board 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 HannStar Board. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Chang and HannStar Board.
Diversification Opportunities for Chia Chang and HannStar Board
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chia and HannStar is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Chia Chang Co and HannStar Board Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HannStar Board Corp 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 HannStar Board. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HannStar Board Corp has no effect on the direction of Chia Chang i.e., Chia Chang and HannStar Board go up and down completely randomly.
Pair Corralation between Chia Chang and HannStar Board
Assuming the 90 days trading horizon Chia Chang is expected to generate 2.56 times less return on investment than HannStar Board. But when comparing it to its historical volatility, Chia Chang Co is 1.95 times less risky than HannStar Board. It trades about 0.05 of its potential returns per unit of risk. HannStar Board Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,195 in HannStar Board Corp on September 12, 2024 and sell it today you would earn a total of 1,965 from holding HannStar Board Corp or generate 61.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Chia Chang Co vs. HannStar Board Corp
Performance |
| Timeline |
| Chia Chang |
| HannStar Board Corp |
Chia Chang and HannStar Board Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Chang and HannStar Board
The main advantage of trading using opposite Chia Chang and HannStar Board positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Chang position performs unexpectedly, HannStar Board 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 HannStar Board will offset losses from the drop in HannStar Board'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 |
| HannStar Board vs. AU Optronics | HannStar Board vs. Innolux Corp | HannStar Board vs. Ruentex Development Co | HannStar Board 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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