Correlation Between Chia and Hua Hong
Can any of the company-specific risk be diversified away by investing in both Chia and Hua Hong 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 Chia and Hua Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia and Hua Hong Semiconductor, you can compare the effects of market volatilities on Chia and Hua Hong 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 Chia with a short position of Hua Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia and Hua Hong.
Diversification Opportunities for Chia and Hua Hong
Very good diversification
The 3 months correlation between Chia and Hua is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Chia and Hua Hong Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Hong Semiconductor and Chia 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 Chia are associated (or correlated) with Hua Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Hong Semiconductor has no effect on the direction of Chia i.e., Chia and Hua Hong go up and down completely randomly.
Pair Corralation between Chia and Hua Hong
Assuming the 90 days trading horizon Chia is expected to under-perform the Hua Hong. In addition to that, Chia is 1.53 times more volatile than Hua Hong Semiconductor. It trades about -0.08 of its total potential returns per unit of risk. Hua Hong Semiconductor is currently generating about 0.03 per unit of volatility. If you would invest 248.00 in Hua Hong Semiconductor on October 10, 2024 and sell it today you would earn a total of 2.00 from holding Hua Hong Semiconductor or generate 0.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 81.82% |
Values | Daily Returns |
Chia vs. Hua Hong Semiconductor
Performance |
Timeline |
Chia |
Hua Hong Semiconductor |
Chia and Hua Hong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chia and Hua Hong
The main advantage of trading using opposite Chia and Hua Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia position performs unexpectedly, Hua Hong 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 Hua Hong will offset losses from the drop in Hua Hong's long position.The idea behind Chia and Hua Hong Semiconductor pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.Hua Hong vs. Electronic Arts | Hua Hong vs. Nucletron Electronic Aktiengesellschaft | Hua Hong vs. STMICROELECTRONICS | Hua Hong vs. Inspire Medical Systems |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |