Correlation Between Chunghwa Telecom and Gemfields Group
Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom and Gemfields Group 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 Gemfields Group 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 Gemfields Group Limited, you can compare the effects of market volatilities on Chunghwa Telecom and Gemfields Group 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 Gemfields Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and Gemfields Group.
Diversification Opportunities for Chunghwa Telecom and Gemfields Group
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chunghwa and Gemfields is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and Gemfields Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemfields Group 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 Gemfields Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemfields Group has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and Gemfields Group go up and down completely randomly.
Pair Corralation between Chunghwa Telecom and Gemfields Group
Assuming the 90 days trading horizon Chunghwa Telecom Co is expected to generate 0.18 times more return on investment than Gemfields Group. However, Chunghwa Telecom Co is 5.5 times less risky than Gemfields Group. It trades about 0.02 of its potential returns per unit of risk. Gemfields Group Limited is currently generating about -0.04 per unit of risk. If you would invest 3,529 in Chunghwa Telecom Co on October 13, 2024 and sell it today you would earn a total of 71.00 from holding Chunghwa Telecom Co or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chunghwa Telecom Co vs. Gemfields Group Limited
Performance |
| Timeline |
| Chunghwa Telecom |
| Gemfields Group |
Chunghwa Telecom and Gemfields Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Telecom and Gemfields Group
The main advantage of trading using opposite Chunghwa Telecom and Gemfields Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Telecom position performs unexpectedly, Gemfields Group 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 Gemfields Group will offset losses from the drop in Gemfields Group's long position.| Chunghwa Telecom vs. CHINA SOUTHN AIR H | Chunghwa Telecom vs. ALTAIR RES INC | Chunghwa Telecom vs. SALESFORCE INC CDR | Chunghwa Telecom vs. Corsair Gaming |
| Gemfields Group vs. Sumitomo Mitsui Construction | Gemfields Group vs. AGRICULTBK HADR25 YC | Gemfields Group vs. ecotel communication ag | Gemfields Group vs. Chunghwa Telecom Co |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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