Correlation Between Chong Hong and ReaLy Development
Can any of the company-specific risk be diversified away by investing in both Chong Hong and ReaLy Development 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 ReaLy Development 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 ReaLy Development Construction, you can compare the effects of market volatilities on Chong Hong and ReaLy Development 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 ReaLy Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chong Hong and ReaLy Development.
Diversification Opportunities for Chong Hong and ReaLy Development
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chong and ReaLy is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Chong Hong Construction and ReaLy Development Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReaLy Development 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 ReaLy Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReaLy Development has no effect on the direction of Chong Hong i.e., Chong Hong and ReaLy Development go up and down completely randomly.
Pair Corralation between Chong Hong and ReaLy Development
Assuming the 90 days trading horizon Chong Hong is expected to generate 6.79 times less return on investment than ReaLy Development. In addition to that, Chong Hong is 1.48 times more volatile than ReaLy Development Construction. It trades about 0.05 of its total potential returns per unit of risk. ReaLy Development Construction is currently generating about 0.53 per unit of volatility. If you would invest 3,400 in ReaLy Development Construction on September 1, 2024 and sell it today you would earn a total of 735.00 from holding ReaLy Development Construction or generate 21.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chong Hong Construction vs. ReaLy Development Construction
Performance |
| Timeline |
| Chong Hong Construction |
| ReaLy Development |
Chong Hong and ReaLy Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chong Hong and ReaLy Development
The main advantage of trading using opposite Chong Hong and ReaLy Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chong Hong position performs unexpectedly, ReaLy Development 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 ReaLy Development will offset losses from the drop in ReaLy Development'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 |
| ReaLy Development vs. Loop Telecommunication International | ReaLy Development vs. Unitech Computer Co | ReaLy Development vs. U Ming Marine Transport | ReaLy Development vs. Far EasTone Telecommunications |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |