Correlation Between Chailease Holding and China Bills
Can any of the company-specific risk be diversified away by investing in both Chailease Holding and China Bills 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 China Bills 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 China Bills Finance, you can compare the effects of market volatilities on Chailease Holding and China Bills 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 China Bills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chailease Holding and China Bills.
Diversification Opportunities for Chailease Holding and China Bills
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chailease and China is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Chailease Holding Co and China Bills Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Bills Finance 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 China Bills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Bills Finance has no effect on the direction of Chailease Holding i.e., Chailease Holding and China Bills go up and down completely randomly.
Pair Corralation between Chailease Holding and China Bills
Assuming the 90 days trading horizon Chailease Holding Co is expected to under-perform the China Bills. In addition to that, Chailease Holding is 5.94 times more volatile than China Bills Finance. It trades about -0.29 of its total potential returns per unit of risk. China Bills Finance is currently generating about 0.27 per unit of volatility. If you would invest 1,500 in China Bills Finance on September 12, 2024 and sell it today you would earn a total of 40.00 from holding China Bills Finance or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chailease Holding Co vs. China Bills Finance
Performance |
| Timeline |
| Chailease Holding |
| China Bills Finance |
Chailease Holding and China Bills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chailease Holding and China Bills
The main advantage of trading using opposite Chailease Holding and China Bills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chailease Holding position performs unexpectedly, China Bills 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 China Bills will offset losses from the drop in China Bills' long position.| Chailease Holding vs. Central Reinsurance Corp | Chailease Holding vs. Huaku Development Co | Chailease Holding vs. Fubon Financial Holding | Chailease Holding vs. CTBC Financial Holding |
| China Bills vs. Chang Hwa Commercial | China Bills vs. IBF Financial Holdings | China Bills vs. Taiwan Business Bank | China Bills vs. Yuanta Financial Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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