Correlation Between Chunghwa Telecom and Saratoga Investment
Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom and Saratoga Investment 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 Chunghwa Telecom and Saratoga Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chunghwa Telecom Co and Saratoga Investment Corp, you can compare the effects of market volatilities on Chunghwa Telecom and Saratoga Investment 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 Chunghwa Telecom with a short position of Saratoga Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and Saratoga Investment.
Diversification Opportunities for Chunghwa Telecom and Saratoga Investment
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chunghwa and Saratoga is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and Saratoga Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saratoga Investment Corp and Chunghwa Telecom 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 Chunghwa Telecom Co are associated (or correlated) with Saratoga Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saratoga Investment Corp has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and Saratoga Investment go up and down completely randomly.
Pair Corralation between Chunghwa Telecom and Saratoga Investment
Considering the 90-day investment horizon Chunghwa Telecom Co is expected to under-perform the Saratoga Investment. In addition to that, Chunghwa Telecom is 2.06 times more volatile than Saratoga Investment Corp. It trades about -0.02 of its total potential returns per unit of risk. Saratoga Investment Corp is currently generating about 0.1 per unit of volatility. If you would invest 2,386 in Saratoga Investment Corp on September 2, 2024 and sell it today you would earn a total of 64.00 from holding Saratoga Investment Corp or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chunghwa Telecom Co vs. Saratoga Investment Corp
Performance |
| Timeline |
| Chunghwa Telecom |
| Saratoga Investment Corp |
Chunghwa Telecom and Saratoga Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Telecom and Saratoga Investment
The main advantage of trading using opposite Chunghwa Telecom and Saratoga Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Telecom position performs unexpectedly, Saratoga Investment 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 Saratoga Investment will offset losses from the drop in Saratoga Investment's long position.| Chunghwa Telecom vs. Grupo Televisa SAB | Chunghwa Telecom vs. Orange SA ADR | Chunghwa Telecom vs. Telefonica Brasil SA | Chunghwa Telecom vs. Telefonica SA ADR |
| Saratoga Investment vs. Diamond Hill Investment | Saratoga Investment vs. AllianceBernstein Holding LP | Saratoga Investment vs. Associated Capital Group | Saratoga Investment vs. Blackstone Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |