Correlation Between Concord Securities and Chief Telecom
Can any of the company-specific risk be diversified away by investing in both Concord Securities and Chief Telecom 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 Concord Securities and Chief Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concord Securities Co and Chief Telecom, you can compare the effects of market volatilities on Concord Securities and Chief Telecom 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 Concord Securities with a short position of Chief Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Securities and Chief Telecom.
Diversification Opportunities for Concord Securities and Chief Telecom
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Concord and Chief is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Concord Securities Co and Chief Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chief Telecom and Concord Securities 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 Concord Securities Co are associated (or correlated) with Chief Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chief Telecom has no effect on the direction of Concord Securities i.e., Concord Securities and Chief Telecom go up and down completely randomly.
Pair Corralation between Concord Securities and Chief Telecom
Assuming the 90 days trading horizon Concord Securities Co is expected to generate 0.58 times more return on investment than Chief Telecom. However, Concord Securities Co is 1.71 times less risky than Chief Telecom. It trades about -0.17 of its potential returns per unit of risk. Chief Telecom is currently generating about -0.28 per unit of risk. If you would invest 1,380 in Concord Securities Co on October 9, 2024 and sell it today you would lose (35.00) from holding Concord Securities Co or give up 2.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Concord Securities Co vs. Chief Telecom
Performance |
| Timeline |
| Concord Securities |
| Chief Telecom |
Concord Securities and Chief Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concord Securities and Chief Telecom
The main advantage of trading using opposite Concord Securities and Chief Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concord Securities position performs unexpectedly, Chief Telecom 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 Chief Telecom will offset losses from the drop in Chief Telecom's long position.| Concord Securities vs. Hung Sheng Construction | Concord Securities vs. Mercuries Life Insurance | Concord Securities vs. YungShin Global Holding | Concord Securities vs. First Hotel Co |
| Chief Telecom vs. Sunny Friend Environmental | Chief Telecom vs. Aspeed Technology | Chief Telecom vs. Standard Foods Corp | Chief Telecom vs. Realtek Semiconductor Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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