Correlation Between Coloray International and ChipsMedia
Can any of the company-specific risk be diversified away by investing in both Coloray International and ChipsMedia 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 Coloray International and ChipsMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloray International Investment and ChipsMedia, you can compare the effects of market volatilities on Coloray International and ChipsMedia 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 Coloray International with a short position of ChipsMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloray International and ChipsMedia.
Diversification Opportunities for Coloray International and ChipsMedia
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Coloray and ChipsMedia is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Coloray International Investme and ChipsMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipsMedia and Coloray International 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 Coloray International Investment are associated (or correlated) with ChipsMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipsMedia has no effect on the direction of Coloray International i.e., Coloray International and ChipsMedia go up and down completely randomly.
Pair Corralation between Coloray International and ChipsMedia
Assuming the 90 days trading horizon Coloray International Investment is expected to under-perform the ChipsMedia. But the stock apears to be less risky and, when comparing its historical volatility, Coloray International Investment is 1.31 times less risky than ChipsMedia. The stock trades about -0.23 of its potential returns per unit of risk. The ChipsMedia is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,406,000 in ChipsMedia on September 3, 2024 and sell it today you would lose (49,000) from holding ChipsMedia or give up 3.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coloray International Investme vs. ChipsMedia
Performance |
| Timeline |
| Coloray International |
| ChipsMedia |
Coloray International and ChipsMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloray International and ChipsMedia
The main advantage of trading using opposite Coloray International and ChipsMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloray International position performs unexpectedly, ChipsMedia 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 ChipsMedia will offset losses from the drop in ChipsMedia's long position.| Coloray International vs. LG Chem | Coloray International vs. DukSan Neolux CoLtd | Coloray International vs. Hyosung Chemical Corp | Coloray International vs. LIG ES SPAC |
| ChipsMedia vs. SBI Investment KOREA | ChipsMedia vs. Coloray International Investment | ChipsMedia vs. Korea Investment Holdings | ChipsMedia vs. Polaris Office Corp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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