Correlation Between Chicony Power and Merry Electronics
Can any of the company-specific risk be diversified away by investing in both Chicony Power and Merry Electronics 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 Merry Electronics 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 Merry Electronics Co, you can compare the effects of market volatilities on Chicony Power and Merry Electronics 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 Merry Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Power and Merry Electronics.
Diversification Opportunities for Chicony Power and Merry Electronics
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chicony and Merry is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology and Merry Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merry Electronics 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 Merry Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merry Electronics has no effect on the direction of Chicony Power i.e., Chicony Power and Merry Electronics go up and down completely randomly.
Pair Corralation between Chicony Power and Merry Electronics
Assuming the 90 days trading horizon Chicony Power Technology is expected to generate 0.95 times more return on investment than Merry Electronics. However, Chicony Power Technology is 1.05 times less risky than Merry Electronics. It trades about -0.01 of its potential returns per unit of risk. Merry Electronics Co is currently generating about -0.04 per unit of risk. If you would invest 13,450 in Chicony Power Technology on October 25, 2024 and sell it today you would lose (850.00) from holding Chicony Power Technology or give up 6.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chicony Power Technology vs. Merry Electronics Co
Performance |
| Timeline |
| Chicony Power Technology |
| Merry Electronics |
Chicony Power and Merry Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicony Power and Merry Electronics
The main advantage of trading using opposite Chicony Power and Merry Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Power position performs unexpectedly, Merry Electronics 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 Merry Electronics will offset losses from the drop in Merry Electronics' long position.| Chicony Power vs. Li Kang Biomedical | Chicony Power vs. Air Asia Co | Chicony Power vs. MediaTek | Chicony Power vs. International CSRC Investment |
| Merry Electronics vs. Unimicron Technology Corp | Merry Electronics vs. Kinsus Interconnect Technology | Merry Electronics vs. Novatek Microelectronics Corp | Merry Electronics vs. Delta Electronics |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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