Correlation Between Cheng Mei and Materials Analysis
Can any of the company-specific risk be diversified away by investing in both Cheng Mei and Materials Analysis 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 Cheng Mei and Materials Analysis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheng Mei Materials and Materials Analysis Technology, you can compare the effects of market volatilities on Cheng Mei and Materials Analysis 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 Cheng Mei with a short position of Materials Analysis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheng Mei and Materials Analysis.
Diversification Opportunities for Cheng Mei and Materials Analysis
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cheng and Materials is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cheng Mei Materials and Materials Analysis Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materials Analysis and Cheng Mei 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 Cheng Mei Materials are associated (or correlated) with Materials Analysis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materials Analysis has no effect on the direction of Cheng Mei i.e., Cheng Mei and Materials Analysis go up and down completely randomly.
Pair Corralation between Cheng Mei and Materials Analysis
Assuming the 90 days trading horizon Cheng Mei Materials is expected to under-perform the Materials Analysis. In addition to that, Cheng Mei is 1.01 times more volatile than Materials Analysis Technology. It trades about -0.01 of its total potential returns per unit of risk. Materials Analysis Technology is currently generating about 0.0 per unit of volatility. If you would invest 25,800 in Materials Analysis Technology on October 13, 2024 and sell it today you would lose (850.00) from holding Materials Analysis Technology or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheng Mei Materials vs. Materials Analysis Technology
Performance |
| Timeline |
| Cheng Mei Materials |
| Materials Analysis |
Cheng Mei and Materials Analysis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheng Mei and Materials Analysis
The main advantage of trading using opposite Cheng Mei and Materials Analysis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheng Mei position performs unexpectedly, Materials Analysis 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 Materials Analysis will offset losses from the drop in Materials Analysis' long position.| Cheng Mei vs. Holy Stone Enterprise | Cheng Mei vs. Walsin Technology Corp | Cheng Mei vs. Yageo Corp | Cheng Mei vs. HannStar Board Corp |
| Materials Analysis vs. Integrated Service Technology | Materials Analysis vs. ASE Industrial Holding | Materials Analysis vs. Gudeng Precision Industrial | Materials Analysis vs. eMemory Technology |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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