Correlation Between Chunghwa Telecom and Lion One
Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom and Lion One 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 Lion One 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 Lion One Metals, you can compare the effects of market volatilities on Chunghwa Telecom and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and Lion One.
Diversification Opportunities for Chunghwa Telecom and Lion One
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chunghwa and Lion is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and Lion One go up and down completely randomly.
Pair Corralation between Chunghwa Telecom and Lion One
Assuming the 90 days trading horizon Chunghwa Telecom Co is expected to generate 0.2 times more return on investment than Lion One. However, Chunghwa Telecom Co is 4.95 times less risky than Lion One. It trades about 0.04 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.03 per unit of risk. If you would invest 3,126 in Chunghwa Telecom Co on September 3, 2024 and sell it today you would earn a total of 474.00 from holding Chunghwa Telecom Co or generate 15.16% 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. Lion One Metals
Performance |
| Timeline |
| Chunghwa Telecom |
| Lion One Metals |
Chunghwa Telecom and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Telecom and Lion One
The main advantage of trading using opposite Chunghwa Telecom and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Telecom position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| Chunghwa Telecom vs. INTERSHOP Communications Aktiengesellschaft | Chunghwa Telecom vs. Aozora Bank | Chunghwa Telecom vs. Solstad Offshore ASA | Chunghwa Telecom vs. BANKINTER ADR 2007 |
| Lion One vs. Cars Inc | Lion One vs. Chunghwa Telecom Co | Lion One vs. United Internet AG | Lion One vs. JAPAN TOBACCO UNSPADR12 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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