Correlation Between Chien Kuo and Voltronic Power
Can any of the company-specific risk be diversified away by investing in both Chien Kuo and Voltronic Power 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 Voltronic Power 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 Voltronic Power Technology, you can compare the effects of market volatilities on Chien Kuo and Voltronic Power 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 Voltronic Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chien Kuo and Voltronic Power.
Diversification Opportunities for Chien Kuo and Voltronic Power
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chien and Voltronic is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Chien Kuo Construction and Voltronic Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltronic Power 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 Voltronic Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltronic Power Tech has no effect on the direction of Chien Kuo i.e., Chien Kuo and Voltronic Power go up and down completely randomly.
Pair Corralation between Chien Kuo and Voltronic Power
Assuming the 90 days trading horizon Chien Kuo Construction is expected to generate 1.17 times more return on investment than Voltronic Power. However, Chien Kuo is 1.17 times more volatile than Voltronic Power Technology. It trades about 0.1 of its potential returns per unit of risk. Voltronic Power Technology is currently generating about -0.21 per unit of risk. If you would invest 2,543 in Chien Kuo Construction on August 30, 2024 and sell it today you would earn a total of 157.00 from holding Chien Kuo Construction or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chien Kuo Construction vs. Voltronic Power Technology
Performance |
| Timeline |
| Chien Kuo Construction |
| Voltronic Power Tech |
Chien Kuo and Voltronic Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chien Kuo and Voltronic Power
The main advantage of trading using opposite Chien Kuo and Voltronic Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chien Kuo position performs unexpectedly, Voltronic Power 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 Voltronic Power will offset losses from the drop in Voltronic Power'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 |
| Voltronic Power vs. Simplo Technology Co | Voltronic Power vs. Amtran Technology Co | Voltronic Power vs. Allis Electric 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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