Correlation Between Choice Development and Ching Feng
Can any of the company-specific risk be diversified away by investing in both Choice Development and Ching Feng 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 Choice Development and Ching Feng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choice Development and Ching Feng Home, you can compare the effects of market volatilities on Choice Development and Ching Feng 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 Choice Development with a short position of Ching Feng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Development and Ching Feng.
Diversification Opportunities for Choice Development and Ching Feng
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Choice and Ching is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Choice Development and Ching Feng Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ching Feng Home and Choice Development 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 Choice Development are associated (or correlated) with Ching Feng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ching Feng Home has no effect on the direction of Choice Development i.e., Choice Development and Ching Feng go up and down completely randomly.
Pair Corralation between Choice Development and Ching Feng
Assuming the 90 days trading horizon Choice Development is expected to generate 1.06 times more return on investment than Ching Feng. However, Choice Development is 1.06 times more volatile than Ching Feng Home. It trades about 0.06 of its potential returns per unit of risk. Ching Feng Home is currently generating about 0.06 per unit of risk. If you would invest 928.00 in Choice Development on November 1, 2024 and sell it today you would earn a total of 652.00 from holding Choice Development or generate 70.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choice Development vs. Ching Feng Home
Performance |
| Timeline |
| Choice Development |
| Ching Feng Home |
Choice Development and Ching Feng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Development and Ching Feng
The main advantage of trading using opposite Choice Development and Ching Feng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Development position performs unexpectedly, Ching Feng 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 Ching Feng will offset losses from the drop in Ching Feng's long position.| Choice Development vs. Chang Type Industrial | Choice Development vs. Anderson Industrial Corp | Choice Development vs. Klingon Aerospace | Choice Development vs. Basso Industry Corp |
| Ching Feng vs. Globe Union Industrial | Ching Feng vs. Taiwan Fu Hsing | Ching Feng vs. Taiwan Hon Chuan | Ching Feng vs. Feng Tay Enterprises |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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