Correlation Between Chailease Holding and Union Insurance
Can any of the company-specific risk be diversified away by investing in both Chailease Holding and Union Insurance 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 Union Insurance 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 Union Insurance Co, you can compare the effects of market volatilities on Chailease Holding and Union Insurance 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 Union Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chailease Holding and Union Insurance.
Diversification Opportunities for Chailease Holding and Union Insurance
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chailease and Union is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chailease Holding Co and Union Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Insurance 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 Union Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Insurance has no effect on the direction of Chailease Holding i.e., Chailease Holding and Union Insurance go up and down completely randomly.
Pair Corralation between Chailease Holding and Union Insurance
Assuming the 90 days trading horizon Chailease Holding Co is expected to under-perform the Union Insurance. In addition to that, Chailease Holding is 1.3 times more volatile than Union Insurance Co. It trades about -0.07 of its total potential returns per unit of risk. Union Insurance Co is currently generating about -0.02 per unit of volatility. If you would invest 3,420 in Union Insurance Co on September 5, 2024 and sell it today you would lose (205.00) from holding Union Insurance Co or give up 5.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chailease Holding Co vs. Union Insurance Co
Performance |
| Timeline |
| Chailease Holding |
| Union Insurance |
Chailease Holding and Union Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chailease Holding and Union Insurance
The main advantage of trading using opposite Chailease Holding and Union Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chailease Holding position performs unexpectedly, Union Insurance 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 Union Insurance will offset losses from the drop in Union Insurance's long position.| Chailease Holding vs. Fubon Financial Holding | Chailease Holding vs. CTBC Financial Holding | Chailease Holding vs. Mega Financial Holding | Chailease Holding vs. Cathay Financial Holding |
| Union Insurance vs. Shinkong Insurance Co | Union Insurance vs. Central Reinsurance Corp | Union Insurance vs. Taiwan Fire Marine | Union Insurance vs. Taichung Commercial Bank |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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