Correlation Between Chunghwa Telecom and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom and Zijin Mining 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 Zijin Mining 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 Zijin Mining Group, you can compare the effects of market volatilities on Chunghwa Telecom and Zijin Mining 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 Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and Zijin Mining.
Diversification Opportunities for Chunghwa Telecom and Zijin Mining
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chunghwa and Zijin is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and Zijin Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zijin Mining 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 Zijin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zijin Mining Group has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and Zijin Mining go up and down completely randomly.
Pair Corralation between Chunghwa Telecom and Zijin Mining
Assuming the 90 days trading horizon Chunghwa Telecom Co is expected to generate 0.2 times more return on investment than Zijin Mining. However, Chunghwa Telecom Co is 5.07 times less risky than Zijin Mining. It trades about -0.04 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.09 per unit of risk. If you would invest 3,600 in Chunghwa Telecom Co on September 26, 2024 and sell it today you would lose (20.00) from holding Chunghwa Telecom Co or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chunghwa Telecom Co vs. Zijin Mining Group
Performance |
| Timeline |
| Chunghwa Telecom |
| Zijin Mining Group |
Chunghwa Telecom and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Telecom and Zijin Mining
The main advantage of trading using opposite Chunghwa Telecom and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Telecom position performs unexpectedly, Zijin Mining 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 Zijin Mining will offset losses from the drop in Zijin Mining's long position.| Chunghwa Telecom vs. T Mobile | Chunghwa Telecom vs. ATT Inc | Chunghwa Telecom vs. ATT Inc | Chunghwa Telecom vs. Deutsche Telekom AG |
| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Rio Tinto Group | Zijin Mining vs. Rio Tinto 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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