Correlation Between Chicony Power and Yageo Corp
Can any of the company-specific risk be diversified away by investing in both Chicony Power and Yageo Corp 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 Yageo Corp 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 Yageo Corp, you can compare the effects of market volatilities on Chicony Power and Yageo Corp 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 Yageo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Power and Yageo Corp.
Diversification Opportunities for Chicony Power and Yageo Corp
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chicony and Yageo is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology and Yageo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yageo Corp 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 Yageo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yageo Corp has no effect on the direction of Chicony Power i.e., Chicony Power and Yageo Corp go up and down completely randomly.
Pair Corralation between Chicony Power and Yageo Corp
Assuming the 90 days trading horizon Chicony Power is expected to generate 1.51 times less return on investment than Yageo Corp. But when comparing it to its historical volatility, Chicony Power Technology is 1.22 times less risky than Yageo Corp. It trades about 0.07 of its potential returns per unit of risk. Yageo Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 53,600 in Yageo Corp on November 30, 2024 and sell it today you would earn a total of 3,000 from holding Yageo Corp or generate 5.6% 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. Yageo Corp
Performance |
| Timeline |
| Chicony Power Technology |
| Yageo Corp |
Chicony Power and Yageo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicony Power and Yageo Corp
The main advantage of trading using opposite Chicony Power and Yageo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Power position performs unexpectedly, Yageo Corp 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 Yageo Corp will offset losses from the drop in Yageo Corp's long position.| Chicony Power vs. U Ming Marine Transport | Chicony Power vs. Shan Loong Transportation Co | Chicony Power vs. Chiu Ting Machinery | Chicony Power vs. X Legend Entertainment Co |
| Yageo Corp vs. Microelectronics Technology | Yageo Corp vs. China Development Financial | Yageo Corp vs. Cathay Financial Holding | Yageo Corp vs. Univacco Technology |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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