Correlation Between Chien Kuo and Highwealth Construction
Can any of the company-specific risk be diversified away by investing in both Chien Kuo and Highwealth Construction 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 Highwealth Construction 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 Highwealth Construction Corp, you can compare the effects of market volatilities on Chien Kuo and Highwealth Construction 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 Highwealth Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chien Kuo and Highwealth Construction.
Diversification Opportunities for Chien Kuo and Highwealth Construction
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chien and Highwealth is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Chien Kuo Construction and Highwealth Construction Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highwealth Construction 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 Highwealth Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highwealth Construction has no effect on the direction of Chien Kuo i.e., Chien Kuo and Highwealth Construction go up and down completely randomly.
Pair Corralation between Chien Kuo and Highwealth Construction
Assuming the 90 days trading horizon Chien Kuo Construction is expected to generate 1.37 times more return on investment than Highwealth Construction. However, Chien Kuo is 1.37 times more volatile than Highwealth Construction Corp. It trades about 0.16 of its potential returns per unit of risk. Highwealth Construction Corp is currently generating about 0.06 per unit of risk. If you would invest 2,700 in Chien Kuo Construction on October 23, 2024 and sell it today you would earn a total of 140.00 from holding Chien Kuo Construction or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chien Kuo Construction vs. Highwealth Construction Corp
Performance |
| Timeline |
| Chien Kuo Construction |
| Highwealth Construction |
Chien Kuo and Highwealth Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chien Kuo and Highwealth Construction
The main advantage of trading using opposite Chien Kuo and Highwealth Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chien Kuo position performs unexpectedly, Highwealth Construction 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 Highwealth Construction will offset losses from the drop in Highwealth Construction'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 |
| Highwealth Construction vs. Huaku Development Co | Highwealth Construction vs. Farglory Land Development | Highwealth Construction vs. Ruentex Development Co | Highwealth Construction vs. Ruentex Industries |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |