Correlation Between Ching Feng and Koge Micro
Can any of the company-specific risk be diversified away by investing in both Ching Feng and Koge Micro 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 Koge Micro 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 Koge Micro Tech, you can compare the effects of market volatilities on Ching Feng and Koge Micro 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 Koge Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ching Feng and Koge Micro.
Diversification Opportunities for Ching Feng and Koge Micro
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ching and Koge is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ching Feng Home and Koge Micro Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koge Micro Tech 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 Koge Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koge Micro Tech has no effect on the direction of Ching Feng i.e., Ching Feng and Koge Micro go up and down completely randomly.
Pair Corralation between Ching Feng and Koge Micro
Assuming the 90 days trading horizon Ching Feng Home is expected to generate 1.37 times more return on investment than Koge Micro. However, Ching Feng is 1.37 times more volatile than Koge Micro Tech. It trades about 0.07 of its potential returns per unit of risk. Koge Micro Tech is currently generating about -0.01 per unit of risk. If you would invest 1,770 in Ching Feng Home on September 4, 2024 and sell it today you would earn a total of 1,310 from holding Ching Feng Home or generate 74.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Ching Feng Home vs. Koge Micro Tech
Performance |
| Timeline |
| Ching Feng Home |
| Koge Micro Tech |
Ching Feng and Koge Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ching Feng and Koge Micro
The main advantage of trading using opposite Ching Feng and Koge Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ching Feng position performs unexpectedly, Koge Micro 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 Koge Micro will offset losses from the drop in Koge Micro'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 |
| Koge Micro vs. ADLINK Technology | Koge Micro vs. Univacco Technology | Koge Micro vs. Feature Integration Technology | Koge Micro vs. Voltronic Power Technology |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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