Correlation Between Chicony Power and Pacific Hospital
Can any of the company-specific risk be diversified away by investing in both Chicony Power and Pacific Hospital 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 Pacific Hospital 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 Pacific Hospital Supply, you can compare the effects of market volatilities on Chicony Power and Pacific Hospital 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 Pacific Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Power and Pacific Hospital.
Diversification Opportunities for Chicony Power and Pacific Hospital
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chicony and Pacific is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology and Pacific Hospital Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Hospital Supply 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 Pacific Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Hospital Supply has no effect on the direction of Chicony Power i.e., Chicony Power and Pacific Hospital go up and down completely randomly.
Pair Corralation between Chicony Power and Pacific Hospital
Assuming the 90 days trading horizon Chicony Power Technology is expected to under-perform the Pacific Hospital. In addition to that, Chicony Power is 2.69 times more volatile than Pacific Hospital Supply. It trades about -0.22 of its total potential returns per unit of risk. Pacific Hospital Supply is currently generating about -0.02 per unit of volatility. If you would invest 8,920 in Pacific Hospital Supply on August 26, 2024 and sell it today you would lose (20.00) from holding Pacific Hospital Supply or give up 0.22% 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. Pacific Hospital Supply
Performance |
| Timeline |
| Chicony Power Technology |
| Pacific Hospital Supply |
Chicony Power and Pacific Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicony Power and Pacific Hospital
The main advantage of trading using opposite Chicony Power and Pacific Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Power position performs unexpectedly, Pacific Hospital 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 Pacific Hospital will offset losses from the drop in Pacific Hospital's long position.| Chicony Power vs. Coretronic | Chicony Power vs. Merry Electronics Co | Chicony Power vs. Sampo Corp | Chicony Power vs. Taiwan Sanyo Electric |
| Pacific Hospital vs. StShine Optical Co | Pacific Hospital vs. TTY Biopharm Co | Pacific Hospital vs. Apex Biotechnology Corp | Pacific Hospital vs. Ruentex Development 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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