Correlation Between Insyde Software and Chiu Ting
Can any of the company-specific risk be diversified away by investing in both Insyde Software and Chiu Ting 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 Insyde Software and Chiu Ting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insyde Software and Chiu Ting Machinery, you can compare the effects of market volatilities on Insyde Software and Chiu Ting 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 Insyde Software with a short position of Chiu Ting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insyde Software and Chiu Ting.
Diversification Opportunities for Insyde Software and Chiu Ting
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Insyde and Chiu is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Insyde Software and Chiu Ting Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiu Ting Machinery and Insyde Software 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 Insyde Software are associated (or correlated) with Chiu Ting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiu Ting Machinery has no effect on the direction of Insyde Software i.e., Insyde Software and Chiu Ting go up and down completely randomly.
Pair Corralation between Insyde Software and Chiu Ting
Assuming the 90 days trading horizon Insyde Software is expected to under-perform the Chiu Ting. In addition to that, Insyde Software is 1.27 times more volatile than Chiu Ting Machinery. It trades about -0.26 of its total potential returns per unit of risk. Chiu Ting Machinery is currently generating about -0.29 per unit of volatility. If you would invest 2,830 in Chiu Ting Machinery on August 30, 2024 and sell it today you would lose (340.00) from holding Chiu Ting Machinery or give up 12.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insyde Software vs. Chiu Ting Machinery
Performance |
| Timeline |
| Insyde Software |
| Chiu Ting Machinery |
Insyde Software and Chiu Ting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insyde Software and Chiu Ting
The main advantage of trading using opposite Insyde Software and Chiu Ting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insyde Software position performs unexpectedly, Chiu Ting 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 Chiu Ting will offset losses from the drop in Chiu Ting's long position.| Insyde Software vs. Otsuka Information Technology | Insyde Software vs. Provision Information CoLtd | Insyde Software vs. Leatec Fine Ceramics | Insyde Software vs. Information Technology Total |
| Chiu Ting vs. Yulon Motor Co | Chiu Ting vs. Far Eastern Department | Chiu Ting vs. China Steel Corp | Chiu Ting vs. Chang Hwa Commercial |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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