Correlation Between Great Computer and Chiu Ting
Can any of the company-specific risk be diversified away by investing in both Great Computer and Chiu Ting 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 Great Computer and Chiu Ting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Computer and Chiu Ting Machinery, you can compare the effects of market volatilities on Great Computer and Chiu Ting 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 Great Computer with a short position of Chiu Ting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Computer and Chiu Ting.
Diversification Opportunities for Great Computer and Chiu Ting
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Great and Chiu is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Great Computer and Chiu Ting Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiu Ting Machinery and Great Computer 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 Great Computer are associated (or correlated) with Chiu Ting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiu Ting Machinery has no effect on the direction of Great Computer i.e., Great Computer and Chiu Ting go up and down completely randomly.
Pair Corralation between Great Computer and Chiu Ting
Assuming the 90 days trading horizon Great Computer is expected to generate 2.88 times more return on investment than Chiu Ting. However, Great Computer is 2.88 times more volatile than Chiu Ting Machinery. It trades about 0.08 of its potential returns per unit of risk. Chiu Ting Machinery is currently generating about -0.29 per unit of risk. If you would invest 1,845 in Great Computer on August 31, 2024 and sell it today you would earn a total of 125.00 from holding Great Computer or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Computer vs. Chiu Ting Machinery
Performance |
| Timeline |
| Great Computer |
| Chiu Ting Machinery |
Great Computer and Chiu Ting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Computer and Chiu Ting
The main advantage of trading using opposite Great Computer and Chiu Ting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Computer position performs unexpectedly, Chiu Ting 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 Chiu Ting will offset losses from the drop in Chiu Ting's long position.| Great Computer vs. Airtac International Group | Great Computer vs. TECO Electric Machinery | Great Computer vs. Chung Hsin Electric Machinery | Great Computer vs. King Slide Works |
| Chiu Ting vs. BES Engineering Co | Chiu Ting vs. Continental Holdings Corp | Chiu Ting vs. Kee Tai Properties | Chiu Ting vs. Hung Sheng Construction |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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