Correlation Between Chicony Power and Medigen Biotechnology
Can any of the company-specific risk be diversified away by investing in both Chicony Power and Medigen Biotechnology 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 Medigen Biotechnology 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 Medigen Biotechnology, you can compare the effects of market volatilities on Chicony Power and Medigen Biotechnology 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 Medigen Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Power and Medigen Biotechnology.
Diversification Opportunities for Chicony Power and Medigen Biotechnology
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chicony and Medigen is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology and Medigen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medigen Biotechnology 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 Medigen Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medigen Biotechnology has no effect on the direction of Chicony Power i.e., Chicony Power and Medigen Biotechnology go up and down completely randomly.
Pair Corralation between Chicony Power and Medigen Biotechnology
Assuming the 90 days trading horizon Chicony Power Technology is expected to generate 1.04 times more return on investment than Medigen Biotechnology. However, Chicony Power is 1.04 times more volatile than Medigen Biotechnology. It trades about 0.06 of its potential returns per unit of risk. Medigen Biotechnology is currently generating about 0.01 per unit of risk. If you would invest 7,400 in Chicony Power Technology on September 2, 2024 and sell it today you would earn a total of 5,400 from holding Chicony Power Technology or generate 72.97% 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. Medigen Biotechnology
Performance |
| Timeline |
| Chicony Power Technology |
| Medigen Biotechnology |
Chicony Power and Medigen Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicony Power and Medigen Biotechnology
The main advantage of trading using opposite Chicony Power and Medigen Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Power position performs unexpectedly, Medigen Biotechnology 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 Medigen Biotechnology will offset losses from the drop in Medigen Biotechnology'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 |
| Medigen Biotechnology vs. Taiwan Semiconductor Manufacturing | Medigen Biotechnology vs. Hon Hai Precision | Medigen Biotechnology vs. MediaTek | Medigen Biotechnology vs. Chunghwa Telecom 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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