Correlation Between Kinko Optical and Chunghwa Telecom
Can any of the company-specific risk be diversified away by investing in both Kinko Optical and Chunghwa 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 Kinko Optical and Chunghwa Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinko Optical Co and Chunghwa Telecom Co, you can compare the effects of market volatilities on Kinko Optical and Chunghwa 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 Kinko Optical with a short position of Chunghwa Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinko Optical and Chunghwa Telecom.
Diversification Opportunities for Kinko Optical and Chunghwa Telecom
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinko and Chunghwa is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kinko Optical Co and Chunghwa Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chunghwa Telecom and Kinko Optical 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 Kinko Optical Co are associated (or correlated) with Chunghwa Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chunghwa Telecom has no effect on the direction of Kinko Optical i.e., Kinko Optical and Chunghwa Telecom go up and down completely randomly.
Pair Corralation between Kinko Optical and Chunghwa Telecom
Assuming the 90 days trading horizon Kinko Optical Co is expected to under-perform the Chunghwa Telecom. In addition to that, Kinko Optical is 2.18 times more volatile than Chunghwa Telecom Co. It trades about -0.07 of its total potential returns per unit of risk. Chunghwa Telecom Co is currently generating about -0.05 per unit of volatility. If you would invest 12,550 in Chunghwa Telecom Co on August 29, 2024 and sell it today you would lose (150.00) from holding Chunghwa Telecom Co or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinko Optical Co vs. Chunghwa Telecom Co
Performance |
| Timeline |
| Kinko Optical |
| Chunghwa Telecom |
Kinko Optical and Chunghwa Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinko Optical and Chunghwa Telecom
The main advantage of trading using opposite Kinko Optical and Chunghwa Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinko Optical position performs unexpectedly, Chunghwa 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 Chunghwa Telecom will offset losses from the drop in Chunghwa Telecom's long position.| Kinko Optical vs. Asia Optical Co | Kinko Optical vs. Genius Electronic Optical | Kinko Optical vs. Altek Corp | Kinko Optical vs. Hannstar Display Corp |
| Chunghwa Telecom vs. Taiwan Mobile Co | Chunghwa Telecom vs. China Steel Corp | Chunghwa Telecom vs. Formosa Plastics Corp | Chunghwa Telecom vs. Cathay Financial Holding |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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