Correlation Between Chien Kuo and Senao International
Can any of the company-specific risk be diversified away by investing in both Chien Kuo and Senao International 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 Chien Kuo and Senao International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chien Kuo Construction and Senao International Co, you can compare the effects of market volatilities on Chien Kuo and Senao International 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 Chien Kuo with a short position of Senao International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chien Kuo and Senao International.
Diversification Opportunities for Chien Kuo and Senao International
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chien and Senao is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Chien Kuo Construction and Senao International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senao International and Chien Kuo 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 Chien Kuo Construction are associated (or correlated) with Senao International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senao International has no effect on the direction of Chien Kuo i.e., Chien Kuo and Senao International go up and down completely randomly.
Pair Corralation between Chien Kuo and Senao International
Assuming the 90 days trading horizon Chien Kuo is expected to generate 6.82 times less return on investment than Senao International. In addition to that, Chien Kuo is 2.12 times more volatile than Senao International Co. It trades about 0.04 of its total potential returns per unit of risk. Senao International Co is currently generating about 0.63 per unit of volatility. If you would invest 3,250 in Senao International Co on November 28, 2024 and sell it today you would earn a total of 185.00 from holding Senao International Co or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chien Kuo Construction vs. Senao International Co
Performance |
| Timeline |
| Chien Kuo Construction |
| Senao International |
Chien Kuo and Senao International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chien Kuo and Senao International
The main advantage of trading using opposite Chien Kuo and Senao International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chien Kuo position performs unexpectedly, Senao International 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 Senao International will offset losses from the drop in Senao International's long position.| Chien Kuo vs. BES Engineering Co | Chien Kuo vs. Continental Holdings Corp | Chien Kuo vs. Kee Tai Properties | Chien Kuo vs. Hung Sheng Construction |
| Senao International vs. Tainan Enterprises Co | Senao International vs. De Licacy Industrial | Senao International vs. Nien Hsing Textile | Senao International vs. Wisher Industrial 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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