Correlation Between Chicony Power and Arbor Technology
Can any of the company-specific risk be diversified away by investing in both Chicony Power and Arbor Technology 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 Arbor Technology 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 Arbor Technology, you can compare the effects of market volatilities on Chicony Power and Arbor Technology 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 Arbor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Power and Arbor Technology.
Diversification Opportunities for Chicony Power and Arbor Technology
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chicony and Arbor is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology and Arbor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor Technology 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 Arbor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Technology has no effect on the direction of Chicony Power i.e., Chicony Power and Arbor Technology go up and down completely randomly.
Pair Corralation between Chicony Power and Arbor Technology
Assuming the 90 days trading horizon Chicony Power Technology is expected to generate 0.97 times more return on investment than Arbor Technology. However, Chicony Power Technology is 1.03 times less risky than Arbor Technology. It trades about 0.06 of its potential returns per unit of risk. Arbor Technology is currently generating about 0.05 per unit of risk. If you would invest 7,470 in Chicony Power Technology on September 3, 2024 and sell it today you would earn a total of 5,330 from holding Chicony Power Technology or generate 71.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chicony Power Technology vs. Arbor Technology
Performance |
| Timeline |
| Chicony Power Technology |
| Arbor Technology |
Chicony Power and Arbor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicony Power and Arbor Technology
The main advantage of trading using opposite Chicony Power and Arbor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Power position performs unexpectedly, Arbor Technology 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 Arbor Technology will offset losses from the drop in Arbor Technology's long position.| Chicony Power vs. WiseChip Semiconductor | Chicony Power vs. Novatek Microelectronics Corp | Chicony Power vs. Leader Electronics | Chicony Power vs. Information Technology Total |
| Arbor Technology vs. Advantech Co | Arbor Technology vs. Asustek Computer | Arbor Technology vs. Compal Electronics | Arbor Technology 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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