Correlation Between Ching Feng and Hi Lai
Can any of the company-specific risk be diversified away by investing in both Ching Feng and Hi Lai 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 Ching Feng and Hi Lai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ching Feng Home and Hi Lai Foods Co, you can compare the effects of market volatilities on Ching Feng and Hi Lai 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 Ching Feng with a short position of Hi Lai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ching Feng and Hi Lai.
Diversification Opportunities for Ching Feng and Hi Lai
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ching and 1268 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ching Feng Home and Hi Lai Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Lai Foods and Ching Feng 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 Ching Feng Home are associated (or correlated) with Hi Lai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Lai Foods has no effect on the direction of Ching Feng i.e., Ching Feng and Hi Lai go up and down completely randomly.
Pair Corralation between Ching Feng and Hi Lai
Assuming the 90 days trading horizon Ching Feng Home is expected to under-perform the Hi Lai. In addition to that, Ching Feng is 1.48 times more volatile than Hi Lai Foods Co. It trades about -0.06 of its total potential returns per unit of risk. Hi Lai Foods Co is currently generating about 0.08 per unit of volatility. If you would invest 15,000 in Hi Lai Foods Co on October 24, 2024 and sell it today you would earn a total of 200.00 from holding Hi Lai Foods Co or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ching Feng Home vs. Hi Lai Foods Co
Performance |
| Timeline |
| Ching Feng Home |
| Hi Lai Foods |
Ching Feng and Hi Lai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ching Feng and Hi Lai
The main advantage of trading using opposite Ching Feng and Hi Lai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ching Feng position performs unexpectedly, Hi Lai 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 Hi Lai will offset losses from the drop in Hi Lai's long position.| Ching Feng vs. Globe Union Industrial | Ching Feng vs. Taiwan Fu Hsing | Ching Feng vs. Taiwan Hon Chuan | Ching Feng vs. Feng Tay Enterprises |
| Hi Lai vs. Chi Hua Fitness | Hi Lai vs. Elite Semiconductor Memory | Hi Lai vs. Onyx Healthcare | Hi Lai vs. Chung Lien Transportation |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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