Correlation Between X Legend and Chicony Power
Can any of the company-specific risk be diversified away by investing in both X Legend and Chicony Power 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 X Legend and Chicony Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X Legend Entertainment Co and Chicony Power Technology, you can compare the effects of market volatilities on X Legend and Chicony Power 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 X Legend with a short position of Chicony Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Legend and Chicony Power.
Diversification Opportunities for X Legend and Chicony Power
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 4994 and Chicony is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding X Legend Entertainment Co and Chicony Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicony Power Technology and X Legend 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 X Legend Entertainment Co are associated (or correlated) with Chicony Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicony Power Technology has no effect on the direction of X Legend i.e., X Legend and Chicony Power go up and down completely randomly.
Pair Corralation between X Legend and Chicony Power
Assuming the 90 days trading horizon X Legend is expected to generate 3.04 times less return on investment than Chicony Power. But when comparing it to its historical volatility, X Legend Entertainment Co is 1.53 times less risky than Chicony Power. It trades about 0.12 of its potential returns per unit of risk. Chicony Power Technology is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 12,100 in Chicony Power Technology on November 28, 2024 and sell it today you would earn a total of 800.00 from holding Chicony Power Technology or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
X Legend Entertainment Co vs. Chicony Power Technology
Performance |
| Timeline |
| X Legend Entertainment |
| Chicony Power Technology |
X Legend and Chicony Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Legend and Chicony Power
The main advantage of trading using opposite X Legend and Chicony Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Legend position performs unexpectedly, Chicony Power 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 Chicony Power will offset losses from the drop in Chicony Power's long position.| X Legend vs. Abnova Taiwan Corp | X Legend vs. Cheng Mei Materials | X Legend vs. BizLink Holding | X Legend vs. Lemtech Holdings Co |
| Chicony Power vs. Prime Oil Chemical | Chicony Power vs. Formosan Union Chemical | Chicony Power vs. C Media Electronics | Chicony Power vs. Taiwan Speciality Chemicals |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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