Correlation Between Chunghwa Telecom and LEWAG HOLDING
Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom and LEWAG HOLDING 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 LEWAG HOLDING 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 LEWAG HOLDING AG, you can compare the effects of market volatilities on Chunghwa Telecom and LEWAG HOLDING 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 LEWAG HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and LEWAG HOLDING.
Diversification Opportunities for Chunghwa Telecom and LEWAG HOLDING
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chunghwa and LEWAG is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and LEWAG HOLDING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEWAG HOLDING AG 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 LEWAG HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEWAG HOLDING AG has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and LEWAG HOLDING go up and down completely randomly.
Pair Corralation between Chunghwa Telecom and LEWAG HOLDING
Assuming the 90 days trading horizon Chunghwa Telecom Co is expected to generate 0.51 times more return on investment than LEWAG HOLDING. However, Chunghwa Telecom Co is 1.96 times less risky than LEWAG HOLDING. It trades about 0.04 of its potential returns per unit of risk. LEWAG HOLDING AG is currently generating about -0.02 per unit of risk. If you would invest 3,108 in Chunghwa Telecom Co on September 5, 2024 and sell it today you would earn a total of 472.00 from holding Chunghwa Telecom Co or generate 15.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chunghwa Telecom Co vs. LEWAG HOLDING AG
Performance |
| Timeline |
| Chunghwa Telecom |
| LEWAG HOLDING AG |
Chunghwa Telecom and LEWAG HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Telecom and LEWAG HOLDING
The main advantage of trading using opposite Chunghwa Telecom and LEWAG HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Telecom position performs unexpectedly, LEWAG HOLDING 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 LEWAG HOLDING will offset losses from the drop in LEWAG HOLDING's long position.| Chunghwa Telecom vs. Fast Retailing Co | Chunghwa Telecom vs. QURATE RETAIL INC | Chunghwa Telecom vs. RELIANCE STEEL AL | Chunghwa Telecom vs. BlueScope Steel Limited |
| LEWAG HOLDING vs. Chunghwa Telecom Co | LEWAG HOLDING vs. Tsingtao Brewery | LEWAG HOLDING vs. Consolidated Communications Holdings | LEWAG HOLDING vs. Citic Telecom International |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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