Correlation Between Chain Chon and Powertech Industrial
Can any of the company-specific risk be diversified away by investing in both Chain Chon and Powertech Industrial 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 Chain Chon and Powertech Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chain Chon Industrial and Powertech Industrial Co, you can compare the effects of market volatilities on Chain Chon and Powertech Industrial 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 Chain Chon with a short position of Powertech Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chain Chon and Powertech Industrial.
Diversification Opportunities for Chain Chon and Powertech Industrial
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chain and Powertech is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Chain Chon Industrial and Powertech Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powertech Industrial and Chain Chon 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 Chain Chon Industrial are associated (or correlated) with Powertech Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powertech Industrial has no effect on the direction of Chain Chon i.e., Chain Chon and Powertech Industrial go up and down completely randomly.
Pair Corralation between Chain Chon and Powertech Industrial
Assuming the 90 days trading horizon Chain Chon is expected to generate 13.63 times less return on investment than Powertech Industrial. But when comparing it to its historical volatility, Chain Chon Industrial is 1.53 times less risky than Powertech Industrial. It trades about 0.01 of its potential returns per unit of risk. Powertech Industrial Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,665 in Powertech Industrial Co on September 2, 2024 and sell it today you would earn a total of 1,420 from holding Powertech Industrial Co or generate 85.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chain Chon Industrial vs. Powertech Industrial Co
Performance |
| Timeline |
| Chain Chon Industrial |
| Powertech Industrial |
Chain Chon and Powertech Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chain Chon and Powertech Industrial
The main advantage of trading using opposite Chain Chon and Powertech Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chain Chon position performs unexpectedly, Powertech Industrial 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 Powertech Industrial will offset losses from the drop in Powertech Industrial's long position.| Chain Chon vs. Trade Van Information Services | Chain Chon vs. C Media Electronics | Chain Chon vs. Mitake Information | Chain Chon vs. Pili International Multimedia |
| Powertech Industrial vs. BES Engineering Co | Powertech Industrial vs. Continental Holdings Corp | Powertech Industrial vs. Kee Tai Properties | Powertech Industrial vs. Hung Sheng Construction |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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