Correlation Between Century Iron and Chung Hung
Can any of the company-specific risk be diversified away by investing in both Century Iron and Chung Hung 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 Century Iron and Chung Hung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Iron And and Chung Hung Steel, you can compare the effects of market volatilities on Century Iron and Chung Hung 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 Century Iron with a short position of Chung Hung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Iron and Chung Hung.
Diversification Opportunities for Century Iron and Chung Hung
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Century and Chung is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Century Iron And and Chung Hung Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chung Hung Steel and Century Iron 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 Century Iron And are associated (or correlated) with Chung Hung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chung Hung Steel has no effect on the direction of Century Iron i.e., Century Iron and Chung Hung go up and down completely randomly.
Pair Corralation between Century Iron and Chung Hung
Assuming the 90 days trading horizon Century Iron And is expected to under-perform the Chung Hung. In addition to that, Century Iron is 1.14 times more volatile than Chung Hung Steel. It trades about -0.24 of its total potential returns per unit of risk. Chung Hung Steel is currently generating about -0.05 per unit of volatility. If you would invest 2,055 in Chung Hung Steel on August 31, 2024 and sell it today you would lose (60.00) from holding Chung Hung Steel or give up 2.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Iron And vs. Chung Hung Steel
Performance |
| Timeline |
| Century Iron And |
| Chung Hung Steel |
Century Iron and Chung Hung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Iron and Chung Hung
The main advantage of trading using opposite Century Iron and Chung Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Iron position performs unexpectedly, Chung Hung 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 Chung Hung will offset losses from the drop in Chung Hung's long position.| Century Iron vs. Basso Industry Corp | Century Iron vs. Chung Hsin Electric Machinery | Century Iron vs. TYC Brother Industrial | Century Iron vs. TECO Electric Machinery |
| Chung Hung vs. China Steel Corp | Chung Hung vs. Yieh Phui Enterprise | Chung Hung vs. Ta Chen Stainless | Chung Hung vs. Yang Ming Marine |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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