Correlation Between Chain Chon and Baotek Industrial
Can any of the company-specific risk be diversified away by investing in both Chain Chon and Baotek 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 Baotek 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 Baotek Industrial Materials, you can compare the effects of market volatilities on Chain Chon and Baotek 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 Baotek Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chain Chon and Baotek Industrial.
Diversification Opportunities for Chain Chon and Baotek Industrial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chain and Baotek is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Chain Chon Industrial and Baotek Industrial Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baotek 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 Baotek Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baotek Industrial has no effect on the direction of Chain Chon i.e., Chain Chon and Baotek Industrial go up and down completely randomly.
Pair Corralation between Chain Chon and Baotek Industrial
Assuming the 90 days trading horizon Chain Chon Industrial is expected to generate 0.53 times more return on investment than Baotek Industrial. However, Chain Chon Industrial is 1.89 times less risky than Baotek Industrial. It trades about 0.01 of its potential returns per unit of risk. Baotek Industrial Materials is currently generating about -0.01 per unit of risk. If you would invest 1,479 in Chain Chon Industrial on September 2, 2024 and sell it today you would lose (4.00) from holding Chain Chon Industrial or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chain Chon Industrial vs. Baotek Industrial Materials
Performance |
| Timeline |
| Chain Chon Industrial |
| Baotek Industrial |
Chain Chon and Baotek Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chain Chon and Baotek Industrial
The main advantage of trading using opposite Chain Chon and Baotek Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chain Chon position performs unexpectedly, Baotek 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 Baotek Industrial will offset losses from the drop in Baotek 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 |
| Baotek Industrial vs. Far Eastern New | Baotek Industrial vs. Eclat Textile Co | Baotek Industrial vs. Ruentex Industries | Baotek Industrial vs. Formosa Taffeta 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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