Correlation Between PChome Online and Chung Fu
Can any of the company-specific risk be diversified away by investing in both PChome Online and Chung Fu 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 PChome Online and Chung Fu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PChome Online and Chung Fu Tex International, you can compare the effects of market volatilities on PChome Online and Chung Fu 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 PChome Online with a short position of Chung Fu. Check out your portfolio center. Please also check ongoing floating volatility patterns of PChome Online and Chung Fu.
Diversification Opportunities for PChome Online and Chung Fu
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PChome and Chung is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding PChome Online and Chung Fu Tex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chung Fu Tex and PChome Online 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 PChome Online are associated (or correlated) with Chung Fu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chung Fu Tex has no effect on the direction of PChome Online i.e., PChome Online and Chung Fu go up and down completely randomly.
Pair Corralation between PChome Online and Chung Fu
Assuming the 90 days trading horizon PChome Online is expected to generate 2.54 times more return on investment than Chung Fu. However, PChome Online is 2.54 times more volatile than Chung Fu Tex International. It trades about 0.07 of its potential returns per unit of risk. Chung Fu Tex International is currently generating about -0.28 per unit of risk. If you would invest 4,925 in PChome Online on September 4, 2024 and sell it today you would earn a total of 255.00 from holding PChome Online or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PChome Online vs. Chung Fu Tex International
Performance |
| Timeline |
| PChome Online |
| Chung Fu Tex |
PChome Online and Chung Fu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PChome Online and Chung Fu
The main advantage of trading using opposite PChome Online and Chung Fu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PChome Online position performs unexpectedly, Chung Fu 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 Fu will offset losses from the drop in Chung Fu's long position.| PChome Online vs. President Chain Store | PChome Online vs. Uni President Enterprises Corp | PChome Online vs. Taiwan FamilyMart Co | PChome Online vs. Eclat Textile Co |
| Chung Fu vs. Cameo Communications | Chung Fu vs. Solar Applied Materials | Chung Fu vs. Daxin Materials Corp | Chung Fu vs. Union Insurance Co |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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