Correlation Between Ever Clear and Chi Sheng
Can any of the company-specific risk be diversified away by investing in both Ever Clear and Chi Sheng 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 Ever Clear and Chi Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ever Clear Environmental Eng and Chi Sheng Chemical, you can compare the effects of market volatilities on Ever Clear and Chi Sheng 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 Ever Clear with a short position of Chi Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ever Clear and Chi Sheng.
Diversification Opportunities for Ever Clear and Chi Sheng
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ever and Chi is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ever Clear Environmental Eng and Chi Sheng Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chi Sheng Chemical and Ever Clear 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 Ever Clear Environmental Eng are associated (or correlated) with Chi Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chi Sheng Chemical has no effect on the direction of Ever Clear i.e., Ever Clear and Chi Sheng go up and down completely randomly.
Pair Corralation between Ever Clear and Chi Sheng
Assuming the 90 days trading horizon Ever Clear Environmental Eng is expected to under-perform the Chi Sheng. But the stock apears to be less risky and, when comparing its historical volatility, Ever Clear Environmental Eng is 1.35 times less risky than Chi Sheng. The stock trades about -0.12 of its potential returns per unit of risk. The Chi Sheng Chemical is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,645 in Chi Sheng Chemical on August 30, 2024 and sell it today you would earn a total of 105.00 from holding Chi Sheng Chemical or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Ever Clear Environmental Eng vs. Chi Sheng Chemical
Performance |
| Timeline |
| Ever Clear Environme |
| Chi Sheng Chemical |
Ever Clear and Chi Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ever Clear and Chi Sheng
The main advantage of trading using opposite Ever Clear and Chi Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ever Clear position performs unexpectedly, Chi Sheng 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 Chi Sheng will offset losses from the drop in Chi Sheng's long position.| Ever Clear vs. Dimerco Data System | Ever Clear vs. WiseChip Semiconductor | Ever Clear vs. Davicom Semiconductor | Ever Clear vs. Powerchip Semiconductor Manufacturing |
| Chi Sheng vs. Maxigen Biotech | Chi Sheng vs. Chunghwa Chemical Synthesis | Chi Sheng vs. Sinphar Pharmaceutical Co | Chi Sheng vs. ScinoPharm Taiwan |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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