Correlation Between Chien Kuo and Arbor Technology
Can any of the company-specific risk be diversified away by investing in both Chien Kuo and Arbor Technology 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 Arbor Technology 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 Arbor Technology, you can compare the effects of market volatilities on Chien Kuo and Arbor Technology 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 Arbor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chien Kuo and Arbor Technology.
Diversification Opportunities for Chien Kuo and Arbor Technology
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chien and Arbor is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Chien Kuo Construction and Arbor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor Technology 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 Arbor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Technology has no effect on the direction of Chien Kuo i.e., Chien Kuo and Arbor Technology go up and down completely randomly.
Pair Corralation between Chien Kuo and Arbor Technology
Assuming the 90 days trading horizon Chien Kuo is expected to generate 1.93 times less return on investment than Arbor Technology. In addition to that, Chien Kuo is 1.1 times more volatile than Arbor Technology. It trades about 0.1 of its total potential returns per unit of risk. Arbor Technology is currently generating about 0.22 per unit of volatility. If you would invest 3,970 in Arbor Technology on August 30, 2024 and sell it today you would earn a total of 535.00 from holding Arbor Technology or generate 13.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chien Kuo Construction vs. Arbor Technology
Performance |
| Timeline |
| Chien Kuo Construction |
| Arbor Technology |
Chien Kuo and Arbor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chien Kuo and Arbor Technology
The main advantage of trading using opposite Chien Kuo and Arbor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chien Kuo position performs unexpectedly, Arbor Technology 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 Arbor Technology will offset losses from the drop in Arbor Technology's long position.| Chien Kuo vs. Yulon Motor Co | Chien Kuo vs. Far Eastern Department | Chien Kuo vs. China Steel Corp | Chien Kuo vs. Chang Hwa Commercial |
| Arbor Technology vs. Advantech Co | Arbor Technology vs. Asustek Computer | Arbor Technology vs. Lite On Technology Corp | Arbor Technology vs. Micro Star International 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 Stocks Directory module to find actively traded stocks across global markets.
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