Correlation Between Chain Chon and Tait Marketing
Can any of the company-specific risk be diversified away by investing in both Chain Chon and Tait Marketing 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 Tait Marketing 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 Tait Marketing Distribution, you can compare the effects of market volatilities on Chain Chon and Tait Marketing 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 Tait Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chain Chon and Tait Marketing.
Diversification Opportunities for Chain Chon and Tait Marketing
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chain and Tait is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Chain Chon Industrial and Tait Marketing Distribution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tait Marketing Distr 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 Tait Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tait Marketing Distr has no effect on the direction of Chain Chon i.e., Chain Chon and Tait Marketing go up and down completely randomly.
Pair Corralation between Chain Chon and Tait Marketing
Assuming the 90 days trading horizon Chain Chon is expected to generate 1.35 times less return on investment than Tait Marketing. In addition to that, Chain Chon is 1.29 times more volatile than Tait Marketing Distribution. It trades about 0.01 of its total potential returns per unit of risk. Tait Marketing Distribution is currently generating about 0.01 per unit of volatility. If you would invest 3,785 in Tait Marketing Distribution on September 2, 2024 and sell it today you would earn a total of 155.00 from holding Tait Marketing Distribution or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chain Chon Industrial vs. Tait Marketing Distribution
Performance |
| Timeline |
| Chain Chon Industrial |
| Tait Marketing Distr |
Chain Chon and Tait Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chain Chon and Tait Marketing
The main advantage of trading using opposite Chain Chon and Tait Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chain Chon position performs unexpectedly, Tait Marketing 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 Tait Marketing will offset losses from the drop in Tait Marketing'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 |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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