Correlation Between Chong Hong and Taiwan Hopax
Can any of the company-specific risk be diversified away by investing in both Chong Hong and Taiwan Hopax 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 Taiwan Hopax 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 Taiwan Hopax Chemsistry, you can compare the effects of market volatilities on Chong Hong and Taiwan Hopax 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 Taiwan Hopax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chong Hong and Taiwan Hopax.
Diversification Opportunities for Chong Hong and Taiwan Hopax
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chong and Taiwan is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chong Hong Construction and Taiwan Hopax Chemsistry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Hopax Chemsistry 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 Taiwan Hopax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Hopax Chemsistry has no effect on the direction of Chong Hong i.e., Chong Hong and Taiwan Hopax go up and down completely randomly.
Pair Corralation between Chong Hong and Taiwan Hopax
Assuming the 90 days trading horizon Chong Hong Construction is expected to generate 2.21 times more return on investment than Taiwan Hopax. However, Chong Hong is 2.21 times more volatile than Taiwan Hopax Chemsistry. It trades about 0.03 of its potential returns per unit of risk. Taiwan Hopax Chemsistry is currently generating about -0.31 per unit of risk. If you would invest 8,610 in Chong Hong Construction on August 30, 2024 and sell it today you would earn a total of 70.00 from holding Chong Hong Construction or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chong Hong Construction vs. Taiwan Hopax Chemsistry
Performance |
| Timeline |
| Chong Hong Construction |
| Taiwan Hopax Chemsistry |
Chong Hong and Taiwan Hopax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chong Hong and Taiwan Hopax
The main advantage of trading using opposite Chong Hong and Taiwan Hopax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chong Hong position performs unexpectedly, Taiwan Hopax 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 Taiwan Hopax will offset losses from the drop in Taiwan Hopax'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 |
| Taiwan Hopax vs. Nantex Industry Co | Taiwan Hopax vs. Chong Hong Construction | Taiwan Hopax vs. Cleanaway Co | Taiwan Hopax vs. Symtek Automation Asia |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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