Correlation Between K Way and Chung Lien
Can any of the company-specific risk be diversified away by investing in both K Way and Chung Lien 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 K Way and Chung Lien into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K Way Information and Chung Lien Transportation, you can compare the effects of market volatilities on K Way and Chung Lien 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 K Way with a short position of Chung Lien. Check out your portfolio center. Please also check ongoing floating volatility patterns of K Way and Chung Lien.
Diversification Opportunities for K Way and Chung Lien
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 5201 and Chung is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding K Way Information and Chung Lien Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chung Lien Transportation and K Way 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 K Way Information are associated (or correlated) with Chung Lien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chung Lien Transportation has no effect on the direction of K Way i.e., K Way and Chung Lien go up and down completely randomly.
Pair Corralation between K Way and Chung Lien
Assuming the 90 days trading horizon K Way Information is expected to under-perform the Chung Lien. In addition to that, K Way is 2.48 times more volatile than Chung Lien Transportation. It trades about -0.06 of its total potential returns per unit of risk. Chung Lien Transportation is currently generating about 0.0 per unit of volatility. If you would invest 4,235 in Chung Lien Transportation on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Chung Lien Transportation or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
K Way Information vs. Chung Lien Transportation
Performance |
| Timeline |
| K Way Information |
| Chung Lien Transportation |
K Way and Chung Lien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K Way and Chung Lien
The main advantage of trading using opposite K Way and Chung Lien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K Way position performs unexpectedly, Chung Lien 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 Chung Lien will offset losses from the drop in Chung Lien's long position.| K Way vs. Standard Foods Corp | K Way vs. WinMate Communication INC | K Way vs. Baotek Industrial Materials | K Way vs. Cameo Communications |
| Chung Lien vs. ADLINK Technology | Chung Lien vs. Chicony Power Technology | Chung Lien vs. Easywell Biomedicals | Chung Lien vs. Ching Feng Home |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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