Correlation Between Chicony Power and Chung Lien
Can any of the company-specific risk be diversified away by investing in both Chicony Power and Chung Lien 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 Chung Lien 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 Chung Lien Transportation, you can compare the effects of market volatilities on Chicony Power and Chung Lien 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 Chung Lien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Power and Chung Lien.
Diversification Opportunities for Chicony Power and Chung Lien
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chicony and Chung is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology and Chung Lien Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chung Lien Transportation 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 Chung Lien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chung Lien Transportation has no effect on the direction of Chicony Power i.e., Chicony Power and Chung Lien go up and down completely randomly.
Pair Corralation between Chicony Power and Chung Lien
Assuming the 90 days trading horizon Chicony Power Technology is expected to generate 3.94 times more return on investment than Chung Lien. However, Chicony Power is 3.94 times more volatile than Chung Lien Transportation. It trades about 0.04 of its potential returns per unit of risk. Chung Lien Transportation is currently generating about 0.05 per unit of risk. If you would invest 12,650 in Chicony Power Technology on September 3, 2024 and sell it today you would earn a total of 150.00 from holding Chicony Power Technology or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chicony Power Technology vs. Chung Lien Transportation
Performance |
| Timeline |
| Chicony Power Technology |
| Chung Lien Transportation |
Chicony Power and Chung Lien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicony Power and Chung Lien
The main advantage of trading using opposite Chicony Power and Chung Lien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Power position performs unexpectedly, Chung Lien 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 Chung Lien will offset losses from the drop in Chung Lien'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 |
| Chung Lien vs. Kerry TJ Logistics | Chung Lien vs. Shan Loong Transportation Co | Chung Lien vs. YuantaP shares Taiwan Top | Chung Lien vs. YuantaP shares Taiwan 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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