Correlation Between Information Technology and Chicony Power
Can any of the company-specific risk be diversified away by investing in both Information Technology and Chicony Power 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 Information Technology and Chicony Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information Technology Total and Chicony Power Technology, you can compare the effects of market volatilities on Information Technology and Chicony Power 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 Information Technology with a short position of Chicony Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Technology and Chicony Power.
Diversification Opportunities for Information Technology and Chicony Power
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Information and Chicony is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Information Technology Total and Chicony Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicony Power Technology and Information Technology 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 Information Technology Total are associated (or correlated) with Chicony Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicony Power Technology has no effect on the direction of Information Technology i.e., Information Technology and Chicony Power go up and down completely randomly.
Pair Corralation between Information Technology and Chicony Power
Assuming the 90 days trading horizon Information Technology Total is expected to under-perform the Chicony Power. But the stock apears to be less risky and, when comparing its historical volatility, Information Technology Total is 1.19 times less risky than Chicony Power. The stock trades about -0.01 of its potential returns per unit of risk. The Chicony Power Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11,150 in Chicony Power Technology on September 4, 2024 and sell it today you would earn a total of 1,600 from holding Chicony Power Technology or generate 14.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Information Technology Total vs. Chicony Power Technology
Performance |
| Timeline |
| Information Technology |
| Chicony Power Technology |
Information Technology and Chicony Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information Technology and Chicony Power
The main advantage of trading using opposite Information Technology and Chicony Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information Technology position performs unexpectedly, Chicony Power 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 Chicony Power will offset losses from the drop in Chicony Power's long position.| Information Technology vs. Digital China Holdings | Information Technology vs. Acer E Enabling Service | Information Technology vs. Sysage Technology Co | Information Technology vs. Green World Fintech |
| Chicony Power vs. WiseChip Semiconductor | Chicony Power vs. Novatek Microelectronics Corp | Chicony Power vs. Leader Electronics | Chicony Power vs. Information Technology Total |
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 Stocks Directory module to find actively traded stocks across global markets.
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