Correlation Between Chien Kuo and Advanced Analog
Can any of the company-specific risk be diversified away by investing in both Chien Kuo and Advanced Analog 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 Advanced Analog 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 Advanced Analog Technology, you can compare the effects of market volatilities on Chien Kuo and Advanced Analog 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 Advanced Analog. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chien Kuo and Advanced Analog.
Diversification Opportunities for Chien Kuo and Advanced Analog
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chien and Advanced is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Chien Kuo Construction and Advanced Analog Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Analog Tech 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 Advanced Analog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Analog Tech has no effect on the direction of Chien Kuo i.e., Chien Kuo and Advanced Analog go up and down completely randomly.
Pair Corralation between Chien Kuo and Advanced Analog
Assuming the 90 days trading horizon Chien Kuo Construction is expected to generate 0.86 times more return on investment than Advanced Analog. However, Chien Kuo Construction is 1.16 times less risky than Advanced Analog. It trades about 0.1 of its potential returns per unit of risk. Advanced Analog Technology is currently generating about 0.04 per unit of risk. If you would invest 1,140 in Chien Kuo Construction on September 14, 2024 and sell it today you would earn a total of 1,650 from holding Chien Kuo Construction or generate 144.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chien Kuo Construction vs. Advanced Analog Technology
Performance |
| Timeline |
| Chien Kuo Construction |
| Advanced Analog Tech |
Chien Kuo and Advanced Analog Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chien Kuo and Advanced Analog
The main advantage of trading using opposite Chien Kuo and Advanced Analog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chien Kuo position performs unexpectedly, Advanced Analog 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 Advanced Analog will offset losses from the drop in Advanced Analog'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 |
| Advanced Analog vs. Taiwan Speciality Chemicals | Advanced Analog vs. Chien Kuo Construction | Advanced Analog vs. Great China Metal | Advanced Analog vs. Mechema Chemicals Int |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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