Correlation Between Galaxy Software and Chung Lien
Can any of the company-specific risk be diversified away by investing in both Galaxy Software and Chung Lien 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 Chung Lien 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 Chung Lien Transportation, you can compare the effects of market volatilities on Galaxy Software and Chung Lien 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 Chung Lien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Software and Chung Lien.
Diversification Opportunities for Galaxy Software and Chung Lien
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Galaxy and Chung is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Software Services and Chung Lien Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chung Lien Transportation 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 Chung Lien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chung Lien Transportation has no effect on the direction of Galaxy Software i.e., Galaxy Software and Chung Lien go up and down completely randomly.
Pair Corralation between Galaxy Software and Chung Lien
Assuming the 90 days trading horizon Galaxy Software Services is expected to generate 3.74 times more return on investment than Chung Lien. However, Galaxy Software is 3.74 times more volatile than Chung Lien Transportation. It trades about 0.05 of its potential returns per unit of risk. Chung Lien Transportation is currently generating about 0.02 per unit of risk. If you would invest 10,370 in Galaxy Software Services on September 1, 2024 and sell it today you would earn a total of 1,580 from holding Galaxy Software Services or generate 15.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galaxy Software Services vs. Chung Lien Transportation
Performance |
| Timeline |
| Galaxy Software Services |
| Chung Lien Transportation |
Galaxy Software and Chung Lien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galaxy Software and Chung Lien
The main advantage of trading using opposite Galaxy Software and Chung Lien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Software position performs unexpectedly, Chung Lien 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 Lien will offset losses from the drop in Chung Lien's long position.| Galaxy Software vs. GeneFerm Biotechnology Co | Galaxy Software vs. Eternal Materials Co | Galaxy Software vs. General Plastic Industrial | Galaxy Software vs. CKM Building Material |
| Chung Lien vs. ADLINK Technology | Chung Lien vs. Chicony Power Technology | Chung Lien vs. Easywell Biomedicals | Chung Lien vs. Ching Feng Home |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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