Correlation Between Chailease Holding and Ten Ren
Can any of the company-specific risk be diversified away by investing in both Chailease Holding and Ten Ren 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 Chailease Holding and Ten Ren into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chailease Holding Co and Ten Ren Tea, you can compare the effects of market volatilities on Chailease Holding and Ten Ren 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 Chailease Holding with a short position of Ten Ren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chailease Holding and Ten Ren.
Diversification Opportunities for Chailease Holding and Ten Ren
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chailease and Ten is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Chailease Holding Co and Ten Ren Tea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ten Ren Tea and Chailease Holding 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 Chailease Holding Co are associated (or correlated) with Ten Ren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ten Ren Tea has no effect on the direction of Chailease Holding i.e., Chailease Holding and Ten Ren go up and down completely randomly.
Pair Corralation between Chailease Holding and Ten Ren
Assuming the 90 days trading horizon Chailease Holding Co is expected to under-perform the Ten Ren. In addition to that, Chailease Holding is 2.2 times more volatile than Ten Ren Tea. It trades about -0.05 of its total potential returns per unit of risk. Ten Ren Tea is currently generating about 0.0 per unit of volatility. If you would invest 3,245 in Ten Ren Tea on August 30, 2024 and sell it today you would lose (55.00) from holding Ten Ren Tea or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Chailease Holding Co vs. Ten Ren Tea
Performance |
| Timeline |
| Chailease Holding |
| Ten Ren Tea |
Chailease Holding and Ten Ren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chailease Holding and Ten Ren
The main advantage of trading using opposite Chailease Holding and Ten Ren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chailease Holding position performs unexpectedly, Ten Ren 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 Ten Ren will offset losses from the drop in Ten Ren's long position.| Chailease Holding vs. Taiwan Secom Co | Chailease Holding vs. TTET Union Corp | Chailease Holding vs. China Steel Chemical | Chailease Holding vs. Taiwan Shin Kong |
| Ten Ren vs. Standard Foods Corp | Ten Ren vs. TTET Union Corp | Ten Ren vs. Great Wall Enterprise | Ten Ren vs. Lian Hwa Foods |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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