Correlation Between Chung Lien and EirGenix
Can any of the company-specific risk be diversified away by investing in both Chung Lien and EirGenix 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 EirGenix 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 EirGenix, you can compare the effects of market volatilities on Chung Lien and EirGenix 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 EirGenix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Lien and EirGenix.
Diversification Opportunities for Chung Lien and EirGenix
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chung and EirGenix is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Chung Lien Transportation and EirGenix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EirGenix 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 EirGenix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EirGenix has no effect on the direction of Chung Lien i.e., Chung Lien and EirGenix go up and down completely randomly.
Pair Corralation between Chung Lien and EirGenix
Assuming the 90 days trading horizon Chung Lien is expected to generate 53.5 times less return on investment than EirGenix. But when comparing it to its historical volatility, Chung Lien Transportation is 2.67 times less risky than EirGenix. It trades about 0.0 of its potential returns per unit of risk. EirGenix is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,300 in EirGenix on September 1, 2024 and sell it today you would earn a total of 120.00 from holding EirGenix or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chung Lien Transportation vs. EirGenix
Performance |
| Timeline |
| Chung Lien Transportation |
| EirGenix |
Chung Lien and EirGenix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Lien and EirGenix
The main advantage of trading using opposite Chung Lien and EirGenix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Lien position performs unexpectedly, EirGenix 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 EirGenix will offset losses from the drop in EirGenix'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 |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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