Correlation Between Chailease Holding and Capital Securities
Can any of the company-specific risk be diversified away by investing in both Chailease Holding and Capital Securities 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 Capital Securities 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 Capital Securities Corp, you can compare the effects of market volatilities on Chailease Holding and Capital Securities 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 Capital Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chailease Holding and Capital Securities.
Diversification Opportunities for Chailease Holding and Capital Securities
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chailease and Capital is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Chailease Holding Co and Capital Securities Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Securities Corp 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 Capital Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Securities Corp has no effect on the direction of Chailease Holding i.e., Chailease Holding and Capital Securities go up and down completely randomly.
Pair Corralation between Chailease Holding and Capital Securities
Assuming the 90 days trading horizon Chailease Holding Co is expected to under-perform the Capital Securities. In addition to that, Chailease Holding is 1.11 times more volatile than Capital Securities Corp. It trades about -0.05 of its total potential returns per unit of risk. Capital Securities Corp is currently generating about 0.11 per unit of volatility. If you would invest 1,115 in Capital Securities Corp on September 14, 2024 and sell it today you would earn a total of 1,265 from holding Capital Securities Corp or generate 113.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Chailease Holding Co vs. Capital Securities Corp
Performance |
| Timeline |
| Chailease Holding |
| Capital Securities Corp |
Chailease Holding and Capital Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chailease Holding and Capital Securities
The main advantage of trading using opposite Chailease Holding and Capital Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chailease Holding position performs unexpectedly, Capital Securities 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 Capital Securities will offset losses from the drop in Capital Securities' 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 |
| Capital Securities vs. Central Reinsurance Corp | Capital Securities vs. Huaku Development Co | Capital Securities vs. Fubon Financial Holding | Capital Securities vs. Chailease Holding Co |
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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