Correlation Between Chicony Power and Chung Fu
Can any of the company-specific risk be diversified away by investing in both Chicony Power and Chung Fu 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 Chicony Power and Chung Fu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chicony Power Technology and Chung Fu Tex International, you can compare the effects of market volatilities on Chicony Power and Chung Fu 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 Chicony Power with a short position of Chung Fu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Power and Chung Fu.
Diversification Opportunities for Chicony Power and Chung Fu
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chicony and Chung is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology and Chung Fu Tex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chung Fu Tex and Chicony Power 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 Chicony Power Technology are associated (or correlated) with Chung Fu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chung Fu Tex has no effect on the direction of Chicony Power i.e., Chicony Power and Chung Fu go up and down completely randomly.
Pair Corralation between Chicony Power and Chung Fu
Assuming the 90 days trading horizon Chicony Power Technology is expected to generate 0.84 times more return on investment than Chung Fu. However, Chicony Power Technology is 1.2 times less risky than Chung Fu. It trades about 0.02 of its potential returns per unit of risk. Chung Fu Tex International is currently generating about -0.23 per unit of risk. If you would invest 12,750 in Chicony Power Technology on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Chicony Power Technology or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chicony Power Technology vs. Chung Fu Tex International
Performance |
| Timeline |
| Chicony Power Technology |
| Chung Fu Tex |
Chicony Power and Chung Fu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicony Power and Chung Fu
The main advantage of trading using opposite Chicony Power and Chung Fu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Power position performs unexpectedly, Chung Fu 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 Fu will offset losses from the drop in Chung Fu's long position.| Chicony Power vs. Ability Enterprise Co | Chicony Power vs. XAC Automation | Chicony Power vs. Cheng Fwa Industrial | Chicony Power vs. Kaulin Mfg |
| Chung Fu vs. Ablerex Electronics Co | Chung Fu vs. AVerMedia Technologies | Chung Fu vs. C Media Electronics | Chung Fu vs. Universal Microelectronics Co |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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