Correlation Between Chailease Holding and Kingstate Electronics
Can any of the company-specific risk be diversified away by investing in both Chailease Holding and Kingstate Electronics 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 Kingstate Electronics 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 Kingstate Electronics, you can compare the effects of market volatilities on Chailease Holding and Kingstate Electronics 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 Kingstate Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chailease Holding and Kingstate Electronics.
Diversification Opportunities for Chailease Holding and Kingstate Electronics
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chailease and Kingstate is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Chailease Holding Co and Kingstate Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingstate Electronics 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 Kingstate Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingstate Electronics has no effect on the direction of Chailease Holding i.e., Chailease Holding and Kingstate Electronics go up and down completely randomly.
Pair Corralation between Chailease Holding and Kingstate Electronics
Assuming the 90 days trading horizon Chailease Holding Co is expected to under-perform the Kingstate Electronics. In addition to that, Chailease Holding is 1.56 times more volatile than Kingstate Electronics. It trades about -0.24 of its total potential returns per unit of risk. Kingstate Electronics is currently generating about -0.14 per unit of volatility. If you would invest 4,760 in Kingstate Electronics on October 22, 2024 and sell it today you would lose (550.00) from holding Kingstate Electronics or give up 11.55% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Chailease Holding Co vs. Kingstate Electronics
Performance |
Timeline |
Chailease Holding |
Kingstate Electronics |
Chailease Holding and Kingstate Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chailease Holding and Kingstate Electronics
The main advantage of trading using opposite Chailease Holding and Kingstate Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chailease Holding position performs unexpectedly, Kingstate Electronics 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 Kingstate Electronics will offset losses from the drop in Kingstate Electronics' 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 |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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