Correlation Between Chicony Power and PCL Technologies
Can any of the company-specific risk be diversified away by investing in both Chicony Power and PCL Technologies 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 PCL Technologies 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 PCL Technologies, you can compare the effects of market volatilities on Chicony Power and PCL Technologies 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 PCL Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Power and PCL Technologies.
Diversification Opportunities for Chicony Power and PCL Technologies
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chicony and PCL is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology and PCL Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCL Technologies 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 PCL Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCL Technologies has no effect on the direction of Chicony Power i.e., Chicony Power and PCL Technologies go up and down completely randomly.
Pair Corralation between Chicony Power and PCL Technologies
Assuming the 90 days trading horizon Chicony Power Technology is expected to under-perform the PCL Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Chicony Power Technology is 1.64 times less risky than PCL Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The PCL Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 7,410 in PCL Technologies on September 2, 2024 and sell it today you would earn a total of 4,390 from holding PCL Technologies or generate 59.24% 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. PCL Technologies
Performance |
| Timeline |
| Chicony Power Technology |
| PCL Technologies |
Chicony Power and PCL Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicony Power and PCL Technologies
The main advantage of trading using opposite Chicony Power and PCL Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Power position performs unexpectedly, PCL Technologies 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 PCL Technologies will offset losses from the drop in PCL Technologies' long position.| Chicony Power vs. Ability Enterprise Co | Chicony Power vs. XAC Automation | Chicony Power vs. Cheng Fwa Industrial | Chicony Power vs. Kaulin Mfg |
| PCL Technologies vs. Phison Electronics | PCL Technologies vs. Transcend Information | PCL Technologies vs. Infortrend Technology | PCL Technologies vs. Panram International |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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