Correlation Between Chia Chang and Fun Yours
Can any of the company-specific risk be diversified away by investing in both Chia Chang and Fun Yours 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 Fun Yours 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 Fun Yours Technology, you can compare the effects of market volatilities on Chia Chang and Fun Yours 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 Fun Yours. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Chang and Fun Yours.
Diversification Opportunities for Chia Chang and Fun Yours
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chia and Fun is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Chia Chang Co and Fun Yours Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fun Yours 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 Fun Yours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fun Yours Technology has no effect on the direction of Chia Chang i.e., Chia Chang and Fun Yours go up and down completely randomly.
Pair Corralation between Chia Chang and Fun Yours
Assuming the 90 days trading horizon Chia Chang is expected to generate 47.12 times less return on investment than Fun Yours. But when comparing it to its historical volatility, Chia Chang Co is 46.26 times less risky than Fun Yours. It trades about 0.05 of its potential returns per unit of risk. Fun Yours Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,379 in Fun Yours Technology on September 12, 2024 and sell it today you would earn a total of 1,561 from holding Fun Yours Technology or generate 46.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Chia Chang Co vs. Fun Yours Technology
Performance |
| Timeline |
| Chia Chang |
| Fun Yours Technology |
Chia Chang and Fun Yours Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Chang and Fun Yours
The main advantage of trading using opposite Chia Chang and Fun Yours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Chang position performs unexpectedly, Fun Yours 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 Fun Yours will offset losses from the drop in Fun Yours' 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 |
| Fun Yours vs. Cheng Mei Materials | Fun Yours vs. Lemtech Holdings Co | Fun Yours vs. Chia Chang Co | Fun Yours 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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