Correlation Between Trade Van and Chaheng Precision
Can any of the company-specific risk be diversified away by investing in both Trade Van and Chaheng Precision 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 Chaheng Precision 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 Chaheng Precision Co, you can compare the effects of market volatilities on Trade Van and Chaheng Precision 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 Chaheng Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Van and Chaheng Precision.
Diversification Opportunities for Trade Van and Chaheng Precision
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Trade and Chaheng is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Trade Van Information Services and Chaheng Precision Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chaheng Precision 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 Chaheng Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chaheng Precision has no effect on the direction of Trade Van i.e., Trade Van and Chaheng Precision go up and down completely randomly.
Pair Corralation between Trade Van and Chaheng Precision
Assuming the 90 days trading horizon Trade Van Information Services is expected to generate 0.88 times more return on investment than Chaheng Precision. However, Trade Van Information Services is 1.14 times less risky than Chaheng Precision. It trades about 0.12 of its potential returns per unit of risk. Chaheng Precision Co is currently generating about 0.09 per unit of risk. If you would invest 7,960 in Trade Van Information Services on August 24, 2024 and sell it today you would earn a total of 240.00 from holding Trade Van Information Services or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Trade Van Information Services vs. Chaheng Precision Co
Performance |
| Timeline |
| Trade Van Information |
| Chaheng Precision |
Trade Van and Chaheng Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trade Van and Chaheng Precision
The main advantage of trading using opposite Trade Van and Chaheng Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Van position performs unexpectedly, Chaheng Precision 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 Chaheng Precision will offset losses from the drop in Chaheng Precision'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 |
| Chaheng Precision vs. Chinese Maritime Transport | Chaheng Precision vs. Trade Van Information Services | Chaheng Precision vs. Jetwell Computer Co | Chaheng Precision vs. U Ming Marine Transport |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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