Correlation Between Chong Hong and Nantex Industry
Can any of the company-specific risk be diversified away by investing in both Chong Hong and Nantex Industry 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 Chong Hong and Nantex Industry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chong Hong Construction and Nantex Industry Co, you can compare the effects of market volatilities on Chong Hong and Nantex Industry 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 Chong Hong with a short position of Nantex Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chong Hong and Nantex Industry.
Diversification Opportunities for Chong Hong and Nantex Industry
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chong and Nantex is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Chong Hong Construction and Nantex Industry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nantex Industry and Chong Hong 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 Chong Hong Construction are associated (or correlated) with Nantex Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nantex Industry has no effect on the direction of Chong Hong i.e., Chong Hong and Nantex Industry go up and down completely randomly.
Pair Corralation between Chong Hong and Nantex Industry
Assuming the 90 days trading horizon Chong Hong Construction is expected to generate 1.15 times more return on investment than Nantex Industry. However, Chong Hong is 1.15 times more volatile than Nantex Industry Co. It trades about 0.03 of its potential returns per unit of risk. Nantex Industry Co is currently generating about 0.0 per unit of risk. If you would invest 7,150 in Chong Hong Construction on August 29, 2024 and sell it today you would earn a total of 1,530 from holding Chong Hong Construction or generate 21.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chong Hong Construction vs. Nantex Industry Co
Performance |
| Timeline |
| Chong Hong Construction |
| Nantex Industry |
Chong Hong and Nantex Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chong Hong and Nantex Industry
The main advantage of trading using opposite Chong Hong and Nantex Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chong Hong position performs unexpectedly, Nantex Industry 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 Nantex Industry will offset losses from the drop in Nantex Industry's long position.| Chong Hong vs. Tainan Spinning Co | Chong Hong vs. Carnival Industrial Corp | Chong Hong vs. Symtek Automation Asia | Chong Hong vs. CTCI Corp |
| Nantex Industry vs. International CSRC Investment | Nantex Industry vs. TSRC Corp | Nantex Industry vs. Ruentex Industries | Nantex Industry vs. Cheng Shin Rubber |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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