Correlation Between ANJI Technology and Chunghwa Precision
Can any of the company-specific risk be diversified away by investing in both ANJI Technology and Chunghwa Precision 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 ANJI Technology and Chunghwa Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANJI Technology Co and Chunghwa Precision Test, you can compare the effects of market volatilities on ANJI Technology and Chunghwa Precision 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 ANJI Technology with a short position of Chunghwa Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANJI Technology and Chunghwa Precision.
Diversification Opportunities for ANJI Technology and Chunghwa Precision
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ANJI and Chunghwa is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding ANJI Technology Co and Chunghwa Precision Test in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chunghwa Precision Test and ANJI Technology 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 ANJI Technology Co are associated (or correlated) with Chunghwa Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chunghwa Precision Test has no effect on the direction of ANJI Technology i.e., ANJI Technology and Chunghwa Precision go up and down completely randomly.
Pair Corralation between ANJI Technology and Chunghwa Precision
Assuming the 90 days trading horizon ANJI Technology Co is expected to under-perform the Chunghwa Precision. But the stock apears to be less risky and, when comparing its historical volatility, ANJI Technology Co is 1.1 times less risky than Chunghwa Precision. The stock trades about -0.03 of its potential returns per unit of risk. The Chunghwa Precision Test is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 57,341 in Chunghwa Precision Test on September 12, 2024 and sell it today you would earn a total of 31,259 from holding Chunghwa Precision Test or generate 54.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANJI Technology Co vs. Chunghwa Precision Test
Performance |
| Timeline |
| ANJI Technology |
| Chunghwa Precision Test |
ANJI Technology and Chunghwa Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANJI Technology and Chunghwa Precision
The main advantage of trading using opposite ANJI Technology and Chunghwa Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANJI Technology position performs unexpectedly, Chunghwa Precision 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 Chunghwa Precision will offset losses from the drop in Chunghwa Precision's long position.| ANJI Technology vs. TSEC Corp | ANJI Technology vs. United Renewable Energy | ANJI Technology vs. Tainergy Tech Co | ANJI Technology vs. Motech Industries Co |
| Chunghwa Precision vs. ANJI Technology Co | Chunghwa Precision vs. Emerging Display Technologies | Chunghwa Precision vs. U Tech Media Corp | Chunghwa Precision 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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