Correlation Between PChome Online and Chun Yuan
Can any of the company-specific risk be diversified away by investing in both PChome Online and Chun Yuan 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 Chun Yuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PChome Online and Chun Yuan Steel, you can compare the effects of market volatilities on PChome Online and Chun Yuan 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 Chun Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of PChome Online and Chun Yuan.
Diversification Opportunities for PChome Online and Chun Yuan
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PChome and Chun is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding PChome Online and Chun Yuan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chun Yuan Steel 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 Chun Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chun Yuan Steel has no effect on the direction of PChome Online i.e., PChome Online and Chun Yuan go up and down completely randomly.
Pair Corralation between PChome Online and Chun Yuan
Assuming the 90 days trading horizon PChome Online is expected to generate 4.74 times more return on investment than Chun Yuan. However, PChome Online is 4.74 times more volatile than Chun Yuan Steel. It trades about 0.08 of its potential returns per unit of risk. Chun Yuan Steel is currently generating about 0.06 per unit of risk. If you would invest 4,855 in PChome Online on September 1, 2024 and sell it today you would earn a total of 345.00 from holding PChome Online or generate 7.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PChome Online vs. Chun Yuan Steel
Performance |
| Timeline |
| PChome Online |
| Chun Yuan Steel |
PChome Online and Chun Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PChome Online and Chun Yuan
The main advantage of trading using opposite PChome Online and Chun Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PChome Online position performs unexpectedly, Chun Yuan 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 Chun Yuan will offset losses from the drop in Chun Yuan's long position.| PChome Online vs. momo Inc | PChome Online vs. President Chain Store | PChome Online vs. Uni President Enterprises Corp | PChome Online vs. Taiwan FamilyMart Co |
| Chun Yuan vs. Basso Industry Corp | Chun Yuan vs. Chung Hsin Electric Machinery | Chun Yuan vs. TYC Brother Industrial | Chun Yuan vs. TECO Electric Machinery |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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