Correlation Between Chicony Power and Taiwan Hon
Can any of the company-specific risk be diversified away by investing in both Chicony Power and Taiwan Hon 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 Taiwan Hon 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 Taiwan Hon Chuan, you can compare the effects of market volatilities on Chicony Power and Taiwan Hon 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 Taiwan Hon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Power and Taiwan Hon.
Diversification Opportunities for Chicony Power and Taiwan Hon
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chicony and Taiwan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology and Taiwan Hon Chuan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Hon Chuan 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 Taiwan Hon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Hon Chuan has no effect on the direction of Chicony Power i.e., Chicony Power and Taiwan Hon go up and down completely randomly.
Pair Corralation between Chicony Power and Taiwan Hon
Assuming the 90 days trading horizon Chicony Power Technology is expected to under-perform the Taiwan Hon. In addition to that, Chicony Power is 1.46 times more volatile than Taiwan Hon Chuan. It trades about 0.0 of its total potential returns per unit of risk. Taiwan Hon Chuan is currently generating about 0.05 per unit of volatility. If you would invest 12,550 in Taiwan Hon Chuan on September 3, 2024 and sell it today you would earn a total of 2,300 from holding Taiwan Hon Chuan or generate 18.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chicony Power Technology vs. Taiwan Hon Chuan
Performance |
| Timeline |
| Chicony Power Technology |
| Taiwan Hon Chuan |
Chicony Power and Taiwan Hon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicony Power and Taiwan Hon
The main advantage of trading using opposite Chicony Power and Taiwan Hon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Power position performs unexpectedly, Taiwan Hon 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 Taiwan Hon will offset losses from the drop in Taiwan Hon'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 |
| Taiwan Hon vs. Univacco Technology | Taiwan Hon vs. Mitake Information | Taiwan Hon vs. Chicony Power Technology | Taiwan Hon vs. Fortune Information Systems |
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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