Correlation Between Chicony Power and NEXCOM International
Can any of the company-specific risk be diversified away by investing in both Chicony Power and NEXCOM International 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 NEXCOM International 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 NEXCOM International Co, you can compare the effects of market volatilities on Chicony Power and NEXCOM International 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 NEXCOM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Power and NEXCOM International.
Diversification Opportunities for Chicony Power and NEXCOM International
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chicony and NEXCOM is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology and NEXCOM International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXCOM International 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 NEXCOM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXCOM International has no effect on the direction of Chicony Power i.e., Chicony Power and NEXCOM International go up and down completely randomly.
Pair Corralation between Chicony Power and NEXCOM International
Assuming the 90 days trading horizon Chicony Power Technology is expected to generate 1.14 times more return on investment than NEXCOM International. However, Chicony Power is 1.14 times more volatile than NEXCOM International Co. It trades about 0.05 of its potential returns per unit of risk. NEXCOM International Co is currently generating about 0.01 per unit of risk. If you would invest 12,200 in Chicony Power Technology on September 12, 2024 and sell it today you would earn a total of 250.00 from holding Chicony Power Technology or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chicony Power Technology vs. NEXCOM International Co
Performance |
| Timeline |
| Chicony Power Technology |
| NEXCOM International |
Chicony Power and NEXCOM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicony Power and NEXCOM International
The main advantage of trading using opposite Chicony Power and NEXCOM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Power position performs unexpectedly, NEXCOM International 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 NEXCOM International will offset losses from the drop in NEXCOM International's long position.| Chicony Power vs. Coretronic | Chicony Power vs. Ruentex Development Co | Chicony Power vs. Symtek Automation Asia | Chicony Power vs. WiseChip Semiconductor |
| NEXCOM International vs. United Radiant Technology | NEXCOM International vs. STL Technology Co | NEXCOM International vs. Tung Thih Electronic | NEXCOM International vs. Voltronic Power Technology |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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