Correlation Between Cameo Communications and CHO Pharma
Can any of the company-specific risk be diversified away by investing in both Cameo Communications and CHO Pharma 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 Cameo Communications and CHO Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cameo Communications and CHO Pharma, you can compare the effects of market volatilities on Cameo Communications and CHO Pharma 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 Cameo Communications with a short position of CHO Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cameo Communications and CHO Pharma.
Diversification Opportunities for Cameo Communications and CHO Pharma
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cameo and CHO is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Cameo Communications and CHO Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHO Pharma and Cameo Communications 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 Cameo Communications are associated (or correlated) with CHO Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHO Pharma has no effect on the direction of Cameo Communications i.e., Cameo Communications and CHO Pharma go up and down completely randomly.
Pair Corralation between Cameo Communications and CHO Pharma
Assuming the 90 days trading horizon Cameo Communications is expected to generate 0.92 times more return on investment than CHO Pharma. However, Cameo Communications is 1.08 times less risky than CHO Pharma. It trades about 0.1 of its potential returns per unit of risk. CHO Pharma is currently generating about 0.04 per unit of risk. If you would invest 1,105 in Cameo Communications on September 15, 2024 and sell it today you would earn a total of 55.00 from holding Cameo Communications or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cameo Communications vs. CHO Pharma
Performance |
| Timeline |
| Cameo Communications |
| CHO Pharma |
Cameo Communications and CHO Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cameo Communications and CHO Pharma
The main advantage of trading using opposite Cameo Communications and CHO Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cameo Communications position performs unexpectedly, CHO Pharma 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 CHO Pharma will offset losses from the drop in CHO Pharma's long position.| Cameo Communications vs. AU Optronics | Cameo Communications vs. Innolux Corp | Cameo Communications vs. Ruentex Development Co | Cameo Communications vs. WiseChip Semiconductor |
| CHO Pharma vs. Asustek Computer | CHO Pharma vs. Cameo Communications | CHO Pharma vs. Tainet Communication System | CHO Pharma vs. Emerging Display Technologies |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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