Correlation Between Chong Hong and Zinwell
Can any of the company-specific risk be diversified away by investing in both Chong Hong and Zinwell 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 Zinwell 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 Zinwell, you can compare the effects of market volatilities on Chong Hong and Zinwell 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 Zinwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chong Hong and Zinwell.
Diversification Opportunities for Chong Hong and Zinwell
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chong and Zinwell is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Chong Hong Construction and Zinwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinwell 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 Zinwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinwell has no effect on the direction of Chong Hong i.e., Chong Hong and Zinwell go up and down completely randomly.
Pair Corralation between Chong Hong and Zinwell
Assuming the 90 days trading horizon Chong Hong Construction is expected to generate 1.35 times more return on investment than Zinwell. However, Chong Hong is 1.35 times more volatile than Zinwell. It trades about 0.05 of its potential returns per unit of risk. Zinwell is currently generating about -0.11 per unit of risk. If you would invest 8,750 in Chong Hong Construction on September 1, 2024 and sell it today you would earn a total of 200.00 from holding Chong Hong Construction or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chong Hong Construction vs. Zinwell
Performance |
| Timeline |
| Chong Hong Construction |
| Zinwell |
Chong Hong and Zinwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chong Hong and Zinwell
The main advantage of trading using opposite Chong Hong and Zinwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chong Hong position performs unexpectedly, Zinwell 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 Zinwell will offset losses from the drop in Zinwell's long position.| Chong Hong vs. Ruentex Development Co | Chong Hong vs. CTCI Corp | Chong Hong vs. Information Technology Total | Chong Hong vs. Ennoconn Corp |
| Zinwell vs. Clevo Co | Zinwell vs. D Link Corp | Zinwell vs. Cheng Uei Precision | Zinwell vs. Senao 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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