Correlation Between Chunghwa Precision and Poya International
Can any of the company-specific risk be diversified away by investing in both Chunghwa Precision and Poya 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 Chunghwa Precision and Poya International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chunghwa Precision Test and Poya International Co, you can compare the effects of market volatilities on Chunghwa Precision and Poya 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 Chunghwa Precision with a short position of Poya International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Precision and Poya International.
Diversification Opportunities for Chunghwa Precision and Poya International
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chunghwa and Poya is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Precision Test and Poya International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poya International and Chunghwa Precision 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 Chunghwa Precision Test are associated (or correlated) with Poya International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poya International has no effect on the direction of Chunghwa Precision i.e., Chunghwa Precision and Poya International go up and down completely randomly.
Pair Corralation between Chunghwa Precision and Poya International
Assuming the 90 days trading horizon Chunghwa Precision Test is expected to generate 4.69 times more return on investment than Poya International. However, Chunghwa Precision is 4.69 times more volatile than Poya International Co. It trades about -0.02 of its potential returns per unit of risk. Poya International Co is currently generating about -0.21 per unit of risk. If you would invest 83,100 in Chunghwa Precision Test on October 25, 2024 and sell it today you would lose (2,300) from holding Chunghwa Precision Test or give up 2.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chunghwa Precision Test vs. Poya International Co
Performance |
| Timeline |
| Chunghwa Precision Test |
| Poya International |
Chunghwa Precision and Poya International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Precision and Poya International
The main advantage of trading using opposite Chunghwa Precision and Poya International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Precision position performs unexpectedly, Poya 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 Poya International will offset losses from the drop in Poya International's long position.| Chunghwa Precision vs. Pontex Polyblend CoLtd | Chunghwa Precision vs. Cathay Financial Holding | Chunghwa Precision vs. CHINA DEVELOPMENT FINANCIAL | Chunghwa Precision vs. Ablerex Electronics Co |
| Poya International vs. Taiwan FamilyMart Co | Poya International vs. President Chain Store | Poya International vs. Eclat Textile Co | Poya International vs. Aspeed 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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