Correlation Between Medigen Vaccine and Chunghwa Chemical
Can any of the company-specific risk be diversified away by investing in both Medigen Vaccine and Chunghwa Chemical 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 Medigen Vaccine and Chunghwa Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medigen Vaccine Biologics and Chunghwa Chemical Synthesis, you can compare the effects of market volatilities on Medigen Vaccine and Chunghwa Chemical 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 Medigen Vaccine with a short position of Chunghwa Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medigen Vaccine and Chunghwa Chemical.
Diversification Opportunities for Medigen Vaccine and Chunghwa Chemical
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Medigen and Chunghwa is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Medigen Vaccine Biologics and Chunghwa Chemical Synthesis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chunghwa Chemical and Medigen Vaccine 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 Medigen Vaccine Biologics are associated (or correlated) with Chunghwa Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chunghwa Chemical has no effect on the direction of Medigen Vaccine i.e., Medigen Vaccine and Chunghwa Chemical go up and down completely randomly.
Pair Corralation between Medigen Vaccine and Chunghwa Chemical
Assuming the 90 days trading horizon Medigen Vaccine Biologics is expected to generate 2.57 times more return on investment than Chunghwa Chemical. However, Medigen Vaccine is 2.57 times more volatile than Chunghwa Chemical Synthesis. It trades about 0.34 of its potential returns per unit of risk. Chunghwa Chemical Synthesis is currently generating about 0.03 per unit of risk. If you would invest 3,705 in Medigen Vaccine Biologics on October 24, 2024 and sell it today you would earn a total of 1,265 from holding Medigen Vaccine Biologics or generate 34.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Medigen Vaccine Biologics vs. Chunghwa Chemical Synthesis
Performance |
| Timeline |
| Medigen Vaccine Biologics |
| Chunghwa Chemical |
Medigen Vaccine and Chunghwa Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medigen Vaccine and Chunghwa Chemical
The main advantage of trading using opposite Medigen Vaccine and Chunghwa Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medigen Vaccine position performs unexpectedly, Chunghwa Chemical 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 Chemical will offset losses from the drop in Chunghwa Chemical's long position.| Medigen Vaccine vs. Evergreen Marine Corp | Medigen Vaccine vs. Yang Ming Marine | Medigen Vaccine vs. Eva Airways Corp | Medigen Vaccine vs. Wan Hai Lines |
| Chunghwa Chemical vs. Excelsior Medical Co | Chunghwa Chemical vs. Formosa Laboratories | Chunghwa Chemical vs. Wellell | Chunghwa Chemical vs. Abnova Taiwan Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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