Correlation Between Chunghwa Telecom and Wilmar International
Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom and Wilmar International 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 Wilmar International 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 Wilmar International Limited, you can compare the effects of market volatilities on Chunghwa Telecom and Wilmar International 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 Wilmar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and Wilmar International.
Diversification Opportunities for Chunghwa Telecom and Wilmar International
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chunghwa and Wilmar is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and Wilmar International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International 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 Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of Chunghwa Telecom i.e., Chunghwa Telecom and Wilmar International go up and down completely randomly.
Pair Corralation between Chunghwa Telecom and Wilmar International
Assuming the 90 days trading horizon Chunghwa Telecom Co is expected to generate 0.5 times more return on investment than Wilmar International. However, Chunghwa Telecom Co is 2.01 times less risky than Wilmar International. It trades about 0.04 of its potential returns per unit of risk. Wilmar International Limited is currently generating about -0.01 per unit of risk. If you would invest 3,298 in Chunghwa Telecom Co on September 4, 2024 and sell it today you would earn a total of 302.00 from holding Chunghwa Telecom Co or generate 9.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.66% |
| Values | Daily Returns |
Chunghwa Telecom Co vs. Wilmar International Limited
Performance |
| Timeline |
| Chunghwa Telecom |
| Wilmar International |
Chunghwa Telecom and Wilmar International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Telecom and Wilmar International
The main advantage of trading using opposite Chunghwa Telecom and Wilmar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Telecom position performs unexpectedly, Wilmar International 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 Wilmar International will offset losses from the drop in Wilmar International's long position.| Chunghwa Telecom vs. Natural Health Trends | Chunghwa Telecom vs. SAFETY MEDICAL PROD | Chunghwa Telecom vs. Bumrungrad Hospital Public | Chunghwa Telecom vs. NAKED WINES PLC |
| Wilmar International vs. Tianjin Capital Environmental | Wilmar International vs. Marie Brizard Wine | Wilmar International vs. United States Steel | Wilmar International vs. KINGBOARD CHEMICAL |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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