Correlation Between Chunghwa Telecom and FLOW TRADERS
Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom and FLOW TRADERS 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 FLOW TRADERS 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 FLOW TRADERS LTD, you can compare the effects of market volatilities on Chunghwa Telecom and FLOW TRADERS 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 FLOW TRADERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and FLOW TRADERS.
Diversification Opportunities for Chunghwa Telecom and FLOW TRADERS
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chunghwa and FLOW is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD 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 FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and FLOW TRADERS go up and down completely randomly.
Pair Corralation between Chunghwa Telecom and FLOW TRADERS
Assuming the 90 days trading horizon Chunghwa Telecom is expected to generate 2.3 times less return on investment than FLOW TRADERS. But when comparing it to its historical volatility, Chunghwa Telecom Co is 2.1 times less risky than FLOW TRADERS. It trades about 0.03 of its potential returns per unit of risk. FLOW TRADERS LTD is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,972 in FLOW TRADERS LTD on August 31, 2024 and sell it today you would earn a total of 136.00 from holding FLOW TRADERS LTD or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chunghwa Telecom Co vs. FLOW TRADERS LTD
Performance |
| Timeline |
| Chunghwa Telecom |
| FLOW TRADERS LTD |
Chunghwa Telecom and FLOW TRADERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Telecom and FLOW TRADERS
The main advantage of trading using opposite Chunghwa Telecom and FLOW TRADERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Telecom position performs unexpectedly, FLOW TRADERS 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 FLOW TRADERS will offset losses from the drop in FLOW TRADERS's long position.| Chunghwa Telecom vs. Marie Brizard Wine | Chunghwa Telecom vs. Perseus Mining Limited | Chunghwa Telecom vs. Nordic Semiconductor ASA | Chunghwa Telecom vs. GALENA MINING LTD |
| FLOW TRADERS vs. Chunghwa Telecom Co | FLOW TRADERS vs. Astral Foods Limited | FLOW TRADERS vs. Singapore Telecommunications Limited | FLOW TRADERS vs. Infrastrutture Wireless Italiane |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |