Correlation Between Galaxy Software and Chien Kuo
Can any of the company-specific risk be diversified away by investing in both Galaxy Software and Chien Kuo 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 Galaxy Software and Chien Kuo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galaxy Software Services and Chien Kuo Construction, you can compare the effects of market volatilities on Galaxy Software and Chien Kuo 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 Galaxy Software with a short position of Chien Kuo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Software and Chien Kuo.
Diversification Opportunities for Galaxy Software and Chien Kuo
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Galaxy and Chien is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Software Services and Chien Kuo Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chien Kuo Construction and Galaxy Software 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 Galaxy Software Services are associated (or correlated) with Chien Kuo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chien Kuo Construction has no effect on the direction of Galaxy Software i.e., Galaxy Software and Chien Kuo go up and down completely randomly.
Pair Corralation between Galaxy Software and Chien Kuo
Assuming the 90 days trading horizon Galaxy Software Services is expected to under-perform the Chien Kuo. But the stock apears to be less risky and, when comparing its historical volatility, Galaxy Software Services is 1.29 times less risky than Chien Kuo. The stock trades about -0.01 of its potential returns per unit of risk. The Chien Kuo Construction is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,543 in Chien Kuo Construction on August 30, 2024 and sell it today you would earn a total of 157.00 from holding Chien Kuo Construction or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galaxy Software Services vs. Chien Kuo Construction
Performance |
| Timeline |
| Galaxy Software Services |
| Chien Kuo Construction |
Galaxy Software and Chien Kuo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galaxy Software and Chien Kuo
The main advantage of trading using opposite Galaxy Software and Chien Kuo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Software position performs unexpectedly, Chien Kuo 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 Chien Kuo will offset losses from the drop in Chien Kuo's long position.| Galaxy Software vs. YuantaP shares Taiwan Electronics | Galaxy Software vs. YuantaP shares Taiwan Top | Galaxy Software vs. YuantaP shares Taiwan Mid Cap | Galaxy Software vs. Fubon MSCI Taiwan |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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