Correlation Between ECloudvalley Digital and Chung Hsin
Can any of the company-specific risk be diversified away by investing in both ECloudvalley Digital and Chung Hsin 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 ECloudvalley Digital and Chung Hsin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eCloudvalley Digital Technology and Chung Hsin Electric Machinery, you can compare the effects of market volatilities on ECloudvalley Digital and Chung Hsin 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 ECloudvalley Digital with a short position of Chung Hsin. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECloudvalley Digital and Chung Hsin.
Diversification Opportunities for ECloudvalley Digital and Chung Hsin
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ECloudvalley and Chung is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding eCloudvalley Digital Technolog and Chung Hsin Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chung Hsin Electric and ECloudvalley Digital 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 eCloudvalley Digital Technology are associated (or correlated) with Chung Hsin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chung Hsin Electric has no effect on the direction of ECloudvalley Digital i.e., ECloudvalley Digital and Chung Hsin go up and down completely randomly.
Pair Corralation between ECloudvalley Digital and Chung Hsin
Assuming the 90 days trading horizon ECloudvalley Digital is expected to generate 3.02 times less return on investment than Chung Hsin. In addition to that, ECloudvalley Digital is 1.03 times more volatile than Chung Hsin Electric Machinery. It trades about 0.03 of its total potential returns per unit of risk. Chung Hsin Electric Machinery is currently generating about 0.09 per unit of volatility. If you would invest 6,280 in Chung Hsin Electric Machinery on August 28, 2024 and sell it today you would earn a total of 10,270 from holding Chung Hsin Electric Machinery or generate 163.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
eCloudvalley Digital Technolog vs. Chung Hsin Electric Machinery
Performance |
| Timeline |
| eCloudvalley Digital |
| Chung Hsin Electric |
ECloudvalley Digital and Chung Hsin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECloudvalley Digital and Chung Hsin
The main advantage of trading using opposite ECloudvalley Digital and Chung Hsin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECloudvalley Digital position performs unexpectedly, Chung Hsin 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 Chung Hsin will offset losses from the drop in Chung Hsin's long position.| ECloudvalley Digital vs. Egis Technology | ECloudvalley Digital vs. Goldsun Building Materials | ECloudvalley Digital vs. HiTi Digital | ECloudvalley Digital vs. YuantaP shares Taiwan Mid Cap |
| Chung Hsin vs. TECO Electric Machinery | Chung Hsin vs. Fortune Electric Co | Chung Hsin vs. Taiwan Cement Corp | Chung Hsin vs. Walsin Lihwa 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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