Correlation Between Chung Lien and Apex Biotechnology
Can any of the company-specific risk be diversified away by investing in both Chung Lien and Apex Biotechnology 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 Chung Lien and Apex Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chung Lien Transportation and Apex Biotechnology Corp, you can compare the effects of market volatilities on Chung Lien and Apex Biotechnology 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 Chung Lien with a short position of Apex Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Lien and Apex Biotechnology.
Diversification Opportunities for Chung Lien and Apex Biotechnology
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chung and Apex is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Chung Lien Transportation and Apex Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Biotechnology Corp and Chung Lien 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 Chung Lien Transportation are associated (or correlated) with Apex Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Biotechnology Corp has no effect on the direction of Chung Lien i.e., Chung Lien and Apex Biotechnology go up and down completely randomly.
Pair Corralation between Chung Lien and Apex Biotechnology
Assuming the 90 days trading horizon Chung Lien Transportation is expected to generate 0.56 times more return on investment than Apex Biotechnology. However, Chung Lien Transportation is 1.78 times less risky than Apex Biotechnology. It trades about 0.02 of its potential returns per unit of risk. Apex Biotechnology Corp is currently generating about -0.07 per unit of risk. If you would invest 4,180 in Chung Lien Transportation on September 1, 2024 and sell it today you would earn a total of 55.00 from holding Chung Lien Transportation or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Lien Transportation vs. Apex Biotechnology Corp
Performance |
| Timeline |
| Chung Lien Transportation |
| Apex Biotechnology Corp |
Chung Lien and Apex Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Lien and Apex Biotechnology
The main advantage of trading using opposite Chung Lien and Apex Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Lien position performs unexpectedly, Apex Biotechnology 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 Apex Biotechnology will offset losses from the drop in Apex Biotechnology's long position.| Chung Lien vs. ADLINK Technology | Chung Lien vs. Chicony Power Technology | Chung Lien vs. Easywell Biomedicals | Chung Lien vs. Ching Feng Home |
| Apex Biotechnology vs. Taiwan Semiconductor Manufacturing | Apex Biotechnology vs. Hon Hai Precision | Apex Biotechnology vs. MediaTek | Apex Biotechnology vs. Chunghwa Telecom 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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