Correlation Between DingZing Advanced and Chialin Precision
Can any of the company-specific risk be diversified away by investing in both DingZing Advanced and Chialin 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 DingZing Advanced and Chialin Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DingZing Advanced Materials and Chialin Precision Industrial, you can compare the effects of market volatilities on DingZing Advanced and Chialin 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 DingZing Advanced with a short position of Chialin Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of DingZing Advanced and Chialin Precision.
Diversification Opportunities for DingZing Advanced and Chialin Precision
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between DingZing and Chialin is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding DingZing Advanced Materials and Chialin Precision Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chialin Precision and DingZing Advanced 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 DingZing Advanced Materials are associated (or correlated) with Chialin Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chialin Precision has no effect on the direction of DingZing Advanced i.e., DingZing Advanced and Chialin Precision go up and down completely randomly.
Pair Corralation between DingZing Advanced and Chialin Precision
Assuming the 90 days trading horizon DingZing Advanced Materials is expected to generate 1.63 times more return on investment than Chialin Precision. However, DingZing Advanced is 1.63 times more volatile than Chialin Precision Industrial. It trades about 0.09 of its potential returns per unit of risk. Chialin Precision Industrial is currently generating about 0.1 per unit of risk. If you would invest 5,136 in DingZing Advanced Materials on October 11, 2024 and sell it today you would earn a total of 10,414 from holding DingZing Advanced Materials or generate 202.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DingZing Advanced Materials vs. Chialin Precision Industrial
Performance |
| Timeline |
| DingZing Advanced |
| Chialin Precision |
DingZing Advanced and Chialin Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DingZing Advanced and Chialin Precision
The main advantage of trading using opposite DingZing Advanced and Chialin Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DingZing Advanced position performs unexpectedly, Chialin 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 Chialin Precision will offset losses from the drop in Chialin Precision's long position.| DingZing Advanced vs. Taichung Commercial Bank | DingZing Advanced vs. BenQ Medical Technology | DingZing Advanced vs. Jia Jie Biomedical | DingZing Advanced vs. Shanghai Commercial Savings |
| Chialin Precision vs. Nankang Rubber Tire | Chialin Precision vs. Galaxy Software Services | Chialin Precision vs. DingZing Advanced Materials | Chialin Precision vs. Dadi Early Childhood Education |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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