Correlation Between C Media and Chicony Power
Can any of the company-specific risk be diversified away by investing in both C Media and Chicony Power 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 C Media and Chicony Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C Media Electronics and Chicony Power Technology, you can compare the effects of market volatilities on C Media and Chicony Power 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 C Media with a short position of Chicony Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Media and Chicony Power.
Diversification Opportunities for C Media and Chicony Power
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 6237 and Chicony is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding C Media Electronics and Chicony Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicony Power Technology and C Media 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 C Media Electronics are associated (or correlated) with Chicony Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicony Power Technology has no effect on the direction of C Media i.e., C Media and Chicony Power go up and down completely randomly.
Pair Corralation between C Media and Chicony Power
Assuming the 90 days trading horizon C Media Electronics is expected to under-perform the Chicony Power. But the stock apears to be less risky and, when comparing its historical volatility, C Media Electronics is 1.24 times less risky than Chicony Power. The stock trades about -0.03 of its potential returns per unit of risk. The Chicony Power Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 12,200 in Chicony Power Technology on September 12, 2024 and sell it today you would earn a total of 250.00 from holding Chicony Power Technology or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
C Media Electronics vs. Chicony Power Technology
Performance |
| Timeline |
| C Media Electronics |
| Chicony Power Technology |
C Media and Chicony Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C Media and Chicony Power
The main advantage of trading using opposite C Media and Chicony Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Media position performs unexpectedly, Chicony Power 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 Chicony Power will offset losses from the drop in Chicony Power's long position.| C Media vs. WIN Semiconductors | C Media vs. GlobalWafers Co | C Media vs. Novatek Microelectronics Corp | C Media vs. Ruentex Development Co |
| Chicony Power vs. Coretronic | Chicony Power vs. Ruentex Development Co | Chicony Power vs. Symtek Automation Asia | Chicony Power vs. WiseChip Semiconductor |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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