Correlation Between Chong Hong and Topco Scientific
Can any of the company-specific risk be diversified away by investing in both Chong Hong and Topco Scientific 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 Topco Scientific 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 Topco Scientific Co, you can compare the effects of market volatilities on Chong Hong and Topco Scientific 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 Topco Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chong Hong and Topco Scientific.
Diversification Opportunities for Chong Hong and Topco Scientific
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chong and Topco is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Chong Hong Construction and Topco Scientific Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topco Scientific 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 Topco Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topco Scientific has no effect on the direction of Chong Hong i.e., Chong Hong and Topco Scientific go up and down completely randomly.
Pair Corralation between Chong Hong and Topco Scientific
Assuming the 90 days trading horizon Chong Hong Construction is expected to generate 2.8 times more return on investment than Topco Scientific. However, Chong Hong is 2.8 times more volatile than Topco Scientific Co. It trades about 0.47 of its potential returns per unit of risk. Topco Scientific Co is currently generating about 0.3 per unit of risk. If you would invest 8,370 in Chong Hong Construction on November 28, 2024 and sell it today you would earn a total of 1,330 from holding Chong Hong Construction or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Chong Hong Construction vs. Topco Scientific Co
Performance |
| Timeline |
| Chong Hong Construction |
| Topco Scientific |
Chong Hong and Topco Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chong Hong and Topco Scientific
The main advantage of trading using opposite Chong Hong and Topco Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chong Hong position performs unexpectedly, Topco Scientific 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 Topco Scientific will offset losses from the drop in Topco Scientific's long position.| Chong Hong vs. Huaku Development Co | Chong Hong vs. Farglory Land Development | Chong Hong vs. Highwealth Construction Corp | Chong Hong vs. Ruentex Development Co |
| Topco Scientific vs. Elan Microelectronics Corp | Topco Scientific vs. Unitech Electronics Co | Topco Scientific vs. San Fu Chemical | Topco Scientific vs. Mechema Chemicals Int |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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