Correlation Between Chong Hong and Systex Corp
Can any of the company-specific risk be diversified away by investing in both Chong Hong and Systex Corp 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 Systex Corp 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 Systex Corp, you can compare the effects of market volatilities on Chong Hong and Systex Corp 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 Systex Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chong Hong and Systex Corp.
Diversification Opportunities for Chong Hong and Systex Corp
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chong and Systex is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Chong Hong Construction and Systex Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systex Corp 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 Systex Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systex Corp has no effect on the direction of Chong Hong i.e., Chong Hong and Systex Corp go up and down completely randomly.
Pair Corralation between Chong Hong and Systex Corp
Assuming the 90 days trading horizon Chong Hong Construction is expected to generate 0.53 times more return on investment than Systex Corp. However, Chong Hong Construction is 1.87 times less risky than Systex Corp. It trades about -0.07 of its potential returns per unit of risk. Systex Corp is currently generating about -0.22 per unit of risk. If you would invest 8,500 in Chong Hong Construction on November 4, 2024 and sell it today you would lose (110.00) from holding Chong Hong Construction or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chong Hong Construction vs. Systex Corp
Performance |
| Timeline |
| Chong Hong Construction |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Systex Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chong Hong and Systex Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chong Hong and Systex Corp
The main advantage of trading using opposite Chong Hong and Systex Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chong Hong position performs unexpectedly, Systex Corp 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 Systex Corp will offset losses from the drop in Systex Corp's long position.The idea behind Chong Hong Construction and Systex Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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