Correlation Between Trade Van and Chung Hsin
Can any of the company-specific risk be diversified away by investing in both Trade Van and Chung Hsin 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 Trade Van and Chung Hsin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trade Van Information Services and Chung Hsin Electric Machinery, you can compare the effects of market volatilities on Trade Van and Chung Hsin 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 Trade Van with a short position of Chung Hsin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Van and Chung Hsin.
Diversification Opportunities for Trade Van and Chung Hsin
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Trade and Chung is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Trade Van Information Services and Chung Hsin Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chung Hsin Electric and Trade Van 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 Trade Van Information Services are associated (or correlated) with Chung Hsin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chung Hsin Electric has no effect on the direction of Trade Van i.e., Trade Van and Chung Hsin go up and down completely randomly.
Pair Corralation between Trade Van and Chung Hsin
Assuming the 90 days trading horizon Trade Van is expected to generate 2.18 times less return on investment than Chung Hsin. But when comparing it to its historical volatility, Trade Van Information Services is 3.53 times less risky than Chung Hsin. It trades about 0.1 of its potential returns per unit of risk. Chung Hsin Electric Machinery is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,810 in Chung Hsin Electric Machinery on October 25, 2024 and sell it today you would earn a total of 7,690 from holding Chung Hsin Electric Machinery or generate 98.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trade Van Information Services vs. Chung Hsin Electric Machinery
Performance |
| Timeline |
| Trade Van Information |
| Chung Hsin Electric |
Trade Van and Chung Hsin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trade Van and Chung Hsin
The main advantage of trading using opposite Trade Van and Chung Hsin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Van position performs unexpectedly, Chung Hsin 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 Chung Hsin will offset losses from the drop in Chung Hsin's long position.| Trade Van vs. Taiwan Sakura Corp | Trade Van vs. Charoen Pokphand Enterprise | Trade Van vs. Taiwan Cogeneration Corp | Trade Van vs. Taiwan Secom Co |
| Chung Hsin vs. TECO Electric Machinery | Chung Hsin vs. Fortune Electric Co | Chung Hsin vs. Taiwan Cement Corp | Chung Hsin vs. Walsin Lihwa 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Positions Ratings 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 | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |