Correlation Between Chien Kuo and Sun Sea
Can any of the company-specific risk be diversified away by investing in both Chien Kuo and Sun Sea 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 Sun Sea 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 Sun Sea Construction, you can compare the effects of market volatilities on Chien Kuo and Sun Sea 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 Sun Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chien Kuo and Sun Sea.
Diversification Opportunities for Chien Kuo and Sun Sea
Significant diversification
The 3 months correlation between Chien and Sun is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Chien Kuo Construction and Sun Sea Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Sea 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 Sun Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Sea Construction has no effect on the direction of Chien Kuo i.e., Chien Kuo and Sun Sea go up and down completely randomly.
Pair Corralation between Chien Kuo and Sun Sea
Assuming the 90 days trading horizon Chien Kuo Construction is expected to generate 0.73 times more return on investment than Sun Sea. However, Chien Kuo Construction is 1.37 times less risky than Sun Sea. It trades about 0.16 of its potential returns per unit of risk. Sun Sea Construction is currently generating about 0.03 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chien Kuo Construction vs. Sun Sea Construction
Performance |
| Timeline |
| Chien Kuo Construction |
| Sun Sea Construction |
Chien Kuo and Sun Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chien Kuo and Sun Sea
The main advantage of trading using opposite Chien Kuo and Sun Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chien Kuo position performs unexpectedly, Sun Sea 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 Sun Sea will offset losses from the drop in Sun Sea'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 |
| Sun Sea vs. Thinking Electronic Industrial | Sun Sea vs. Orient Semiconductor Electronics | Sun Sea vs. Vanguard International Semiconductor | Sun Sea vs. C Media Electronics |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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