Correlation Between Chunghwa Telecom and Ming Le
Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom and Ming Le 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 Ming Le 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 Ming Le Sports, you can compare the effects of market volatilities on Chunghwa Telecom and Ming Le 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 Ming Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and Ming Le.
Diversification Opportunities for Chunghwa Telecom and Ming Le
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chunghwa and Ming is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports 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 Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and Ming Le go up and down completely randomly.
Pair Corralation between Chunghwa Telecom and Ming Le
Assuming the 90 days trading horizon Chunghwa Telecom Co is expected to generate 0.43 times more return on investment than Ming Le. However, Chunghwa Telecom Co is 2.31 times less risky than Ming Le. It trades about 0.04 of its potential returns per unit of risk. Ming Le Sports is currently generating about 0.01 per unit of risk. If you would invest 3,108 in Chunghwa Telecom Co on September 12, 2024 and sell it today you would earn a total of 512.00 from holding Chunghwa Telecom Co or generate 16.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chunghwa Telecom Co vs. Ming Le Sports
Performance |
| Timeline |
| Chunghwa Telecom |
| Ming Le Sports |
Chunghwa Telecom and Ming Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Telecom and Ming Le
The main advantage of trading using opposite Chunghwa Telecom and Ming Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Telecom position performs unexpectedly, Ming Le 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 Ming Le will offset losses from the drop in Ming Le's long position.| Chunghwa Telecom vs. Superior Plus Corp | Chunghwa Telecom vs. SIVERS SEMICONDUCTORS AB | Chunghwa Telecom vs. Norsk Hydro ASA | Chunghwa Telecom vs. Reliance Steel Aluminum |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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